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COMMENTARY | The news this week that mortgage rates had dropped below 4 percent for the first time in history seemed, at first, like good news. If consumers can refinance existing mortgages or new buyers can jump in to the real estate market, it might just save us from another impending recession.

Unfortunately, that is not what is going to happen, and most economic experts agree. Banks and mortgage companies have tightened their lending criteria to the point where even those with excellent credit histories don’t qualify. Many lenders have already sold off their mortgage portfolios and are now only the servicer, which means they cannot work with homeowners to refinance.

What the mortgage rate drop does indicate is that the economy continues to worsen. With the threat of a new recession hanging over everyone’s head, new buyers simply aren’t entering the real estate market. Why buy a home when its value could drop 25 percent or more over the next year? Everyone is in a holding pattern.

What it means for me is that I am focusing on paying down debt and reducing my exposure to the markets. I own my home but have equity in it. That means that, as long as I don’t need to sell it in the next few years, I can ride out the economic turbulence and wait for the economy to improve. It still pains me that my mortgage interest rate is substantially higher than today’s posted rates, but at least I know we will have a roof over our heads.

When mortgage rates are low, so are other interest rates, and those nearing a large event that they have saved for, such as college or retirement, will feel the pain in their savings. My son is off to college next fall and his education account has taken a hit, both with lower interest rates and a bear equities market. It will mean more of his college will be funded from current income and that will be the case across the country. For some high school students, it may mean deferring college and trying to jump into the workforce for a few years. For some retirees, it may mean staying employed for a few more years. Neither of those options are a sure thing with record high unemployment.

For most of America, the historically low mortgage rates will remain only a dream. The reality will be much tougher.

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