Washington -- Low interest rates have failed to generate large numbers of loans comparing this recession to 2003, a national U.S. mortgage broker said.
The Federal Home Loan Mortgage Corp. said Wednesday that long-term interest rates dropped to 5.21 percent in 2003, a record low at the time. In response, nearly $4 trillion in loans were written, including $2.7 billion in refinanced mortgages.
In the current recession, with interest rates for 30-year and 15-year mortgages falling to new lows, loan originations are projected to be less than half of 2003 levels, Freddie Mac said.
The explanation is in at least three parts, Freddie Mac said.