Small mortgage and real estate professionals listen up: Mortgage rates in the U.S. have continued to fall because of stock market volatility and economic reports that have come in weaker than expected. Mortgage rates dropped to 4.23 percent and are at their lowest since November 2013, according to Freddie Mac. They dropped a little lower to 3.33 percent on the 15-year loan package.

10-year Treasuries, the benchmark for consumer debt, dropped to a 3-month low this past week following a report showing that manufacturing in January slowed down. The S&P 500 lost more than 5 percent since January 15, 2014. The effect on mortgage rates is expected to be temporary as the Federal Reserve works to roll out stimulus measures.

Low Rates Expected to be Temporary

Greg McBride, of says, “The economy does not improve in a straight line. It’s like Sunday afternoon in New York City. It was 50 degrees outside, but that does not change the fact that it is still winter.” He went on to say that with the economy improving, the Fed will dial back on the stimulus and the rates will move higher as the year continues to unfold.

The central bank is tapering the bond purchases that have kept the cost of borrowing at levels close to historic lows. The Federal Open Market Committee announced last week that it will begin trimming the monthly buying to $65 billion marking its second $10 billion reduction to date.

Low Rates Help Housing Recovery

The low rates are a win-win for everyone when looked at in depth because it helped to provide a strong foundation for the continued housing recovery. U.S. home prices have risen to 11 percent in December 2013 from the previous year. According to Irvine, California-based CoreLogic inc., this marks the 22nd straight increase in property values. Bankers are more confident about the mortgage sector because the housing value increases are stable.

Even the jumbo loan rates which typically come in at as much as one half point higher than those of the conventional loan markets have hit lows even below those of the conventional rates by as much as one quarter percent.

Low mortgage rates have helped provide a foundation for the housing recovery. U.S. home prices rose 11 percent in December from a year earlier, the 22nd straight increase.

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