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Mortgage rates could be lower

Homeowners may breathe a sigh of relief with mortgage rates expected to go lower.

Homeowners may breathe a sigh of relief with mortgage rates expected to go lower.

Mortgage rates have teetered around historic lows in the past few years following the economic collapse that left the country in a recession. Now, according to a recent Wall Street Journal article, mortgage rates should be lower based on a historical measure.

The Journal reported that housing is still dragging on the economy, and the spread between mortgage rates potential homebuyers see and the benchmark interest rate investors ask for to buy bonds backed by home loans is keeping the industry in a slower recovery.

A key interest rate on mortgage-backed securities, which is known as the current coupon yield, has decreased faster than the average U.S. 30-year mortgage rates. The spread between mortgage rates seen and benchmark interest rates investors ask for was 0.96 percent, which is almost double its average over close to 30 years.

"To me what it tells us is that traditional monetary-policy measures to help get the housing market rolling again are weaker than they normally would be," said Frederic Mishkin, Columbia University official and former Federal Reserve governor, to the source.

Data from the Mortgage Bankers Association's Weekly Mortgage Application Survey showed that mortgage applications for the week ending February 17 decreased 4.5 percent from one week earlier.

Despite the drop in spread in mortgage rates and the benchmark rate and the recent drop in applications, home loans can still be secured for historically low interest rates. Homebuyers looking to save even more money after acquiring favorable financing on a purchase might research moving pods, which are an affordable way to relocate.