U-S-A Today reports: “Low interest rates, defaults, and refinancing have shaved more than 100 billion dollars off the nation’s annual mortgage bill”. The Bureau of Economic Analysis reports the nation’s total mortgage debt has fallen from nearly 11 trillion dollars at the mid-2008 peak to 10.3 trillion in the first three months of 2011.
Economic effects of lower mortgage debt; for the first time since 1998, households are saving more than they’re spending on mortgage interest. Mortgage interest consumes 5.27% of the nation’s after-tax income, the lowest since 2004 and comparable to the 1980s and 90s. The average interest rate on all mortgages has fallen 16 consecutive quarters to 5.96% … the lowest since the government began keeping track in 1977.
The Mortgage Bankers Association reports 9% of mortgage borrowers are behind on their payments, and 4.6% of homes are in foreclosure.
I think the recession has forced many Americans to take a good hard look at their personal finances, with an eye toward lowering all their interest payments.
Our thought for today is from Bob Hope:
“A bank is a place that will lend you money if you can prove that you don’t need it.”