MORTGAGE RATES » Home Mortgage Loan News

The Commerce Department reported on Wednesday that new U.S.home sales plunged in January to the lowest point since 1963. According to stats from the department, January saw an 11.2 percent drop, which brought new home sales down to a seasonally-adjusted rate of 309,000. This is the third straight month-to-month drop.

The Numbers Are Surprising

Economists who had been surveyed by MarketWatch had actually forecasted sales to rise slightly, not have a record plunge. The pace expected was 355,000 and was thought to occur because homebuyers had supposedlybeen taking advantage of the homebuyer tax credit that had recently been expanded to include homeowners who wanted to upgrade to bigger homes.

While some experts believe that weather (the recent blizzards) may have played a role in the drop in new home sales, the data is still a huge shock and is a bit unnerving.

The Housing Industry Is Still Struggling

The record-low numbers show that the industry is still struggling to recover from the housing crash. The new home sales reported for January 2010 were down 6.1 percent compared with January 2009 when sales were at 329,000. Believe it or not, that was the previous record low, which shows housing isn't improving yet.

But with mortgage rates still low, the median sale price of a new home having dropped 2.4 percent compared to a year earlier and the homebuyer tax credit still going strong for a month or so, homebuyers still have a shot at getting a home at an affordable price. So if you want one, now's the time to get out there and shop around.

This is a guest post by Mrs. Accountability, who writes at personal finance blog Out of Debt Again, where she details how her family is getting out of debt, again. Follow her on Twitter @outofdebtagain.

How do you feel about mortgage debt? Do you think it's a necessary evil, are you totally against having a mortgage, or are you trying to pay yours off as soon as you can? Here are some of the opinions I've heard when it comes to having a mortgage.

Opinion #1: Keep It Forever

Some people feel that mortgage debt is acceptable and possibly necessary. They expect to have a mortgage payment for their entire life.

I was once told by an acquaintance that it was a ridiculous goal wanting to pay off my mortgage. He told me, "Oh no, you ALWAYS want to have a mortgage." I think the idea is you always want the mortgage interest for tax deductions. Our mortgage is under $50K, and we don't have enough deductions to itemize, so that doesn't work out for us.

Opinion #2: Don't Have a Mortgage, Rent Instead

Some feel that it's best to never own a home, instead preferring to rent. I personally have never been pleased with renting, and prefer to be a homeowner. I guess some of your preference would depend on your lifestyle.

Opinion #3: Pay It Off As Soon As Possible

Some believe mortgage debt should be paid off as soon as possible. From what I see in the blogosphere, many frugal personal finance bloggers hold this view. I think the older generations - our grandparents and parents - worked to pay off their mortgage debt as soon as possible. My maternal grandparents never had a mortgage because my grandfather built their home, and he and my grandmother lived in it for over five decades.

My mother and father bought a home when my father first got out of the Navy, but when he left us five years later, my mother was unable to secure a job that could allow her to keep up with the mortgage. As a result, we moved around a lot, and I hated it. I decided early on that I'd always want to own so I could stay in one place like my grandparents.

I Want to Be Like Her

I remember once going to a friend's mother's home when I was just 20. The mother's home was completely paid for; a ranch style, four bedroom home with a pool in a nice neighborhood. Granted, maybe too big for a couple with an empty nest, but while she and her spouse had no monthly payment, my rent was $200 a month for a tiny travel trailer.

I thought it was the neatest thing to own a lovely home and not have a monthly payment. That thought has always stuck with me.

Our Mortgage History

My husband and I bought our first home in the '80s, but we divorced, selling the home and going our separate ways a few years later. Sometimes I think of how we might have had the house paid off had we stayed together. On the other hand, the neighborhood has degraded in the past two decades.

My husband and I reconciled and remarried and bought another second home, this time in a rural area where we could have a few acres of land. We are hoping to refinance and convert our 30-year mortgage into a 15-year mortgage. Currently we have 23 years left on our mortgage at 7.375%; the 15 year mortgage would be 5.125%.

I personally do not think that mortgage debt is an okay debt. I look at it as any other type of debt, whether that be school loans, vehicle loan or credit card debt. You are not free when you owe money to someone else.

Where do you stand? Do you think mortgage debt is an "okay" debt?

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