Barry Shaner, president and chief executive of Directions Credit Union of Sylvania, has been in the financial industry a long time, but he acknowledges that few in the industry have ever seen mortgage interest rates like those available now.
"You're talking about rates that are even lower than they were in the '50s. You'd have to go back and find somebody who's fairly old to remember experiencing anything like this," Mr. Shaner said.
For the fourth straight week, mortgage rates dipped to historic lows, with the bellwether 30-year fixed rate at an average 3.78 percent Thursday, according to mortgage buyer Freddie Mac. The 15-year rate was steady at 3.04, matching the record low it hit last week.
A search of local rates showed many lenders near those averages.
Directions, KeyBank, PNC Bank, and Glass City Federal Credit Union were all at 3.875 percent without prepaid interest or "points" on their 30-year fixed. Some were a tad lower, like First Federal Bank of the Midwest, which was at 3.778 percent.
Mr. Shaner said the historic lows are tempting older homeowners to refinance. "What we've found is that, given that folks are getting closer to retirement, their outlook is a little more towards paying off their debt earlier rather than taking on more debt prior to retirement," he said.
Martin Sutter, president of Genoa Bank, said that while the rates have spurred more lending, there isn't a huge increase because hurdles to qualify for those low rates still exist.
To qualify, most need a good home appraisal, a down payment of 20 percent, and a good credit score.
"[The number of mortgage loans] is obviously much better now than it's been the last two years, but we're not at 2006 record levels," he said.
Consumer confidence remains an impediment, and the Ohio economy is still flat. "There've been no real wage increases and no real certainty of employment. So while it is much improved this year from what it was last year, we still have a ways to go," Mr. Sutter said.
John Mangas, broker-owner of ReMax Preferred Associates in Toledo, said rates below 4 percent would be sparking more home sales, but rates just above 4 percent last year pulled many home buyers into the market.
"While these interest rates are helpful, they're not as helpful as they would have been one or two years ago," he said.
Still, the low rates are persuading occupants of high-end apartments to buy homes. "We are seeing first-time buyers coming out of those apartments and buying a $125,000 house with very little down and still having a monthly payment of less than they were paying for their apartments," Mr. Mangas said.
More helpful, he added, is that private mortgage insurers have begun backing mortgages with as low as 5 percent down. Last year, insurers wouldn't back loans with less than 20 percent down, he said.
Buyers still need high credit scores and secure jobs, but insurers are taking more risks, he said.
Contact Jon Chavez at: firstname.lastname@example.org or 419-724-6128.
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