Think you can afford it now?

For the first time in seven years the long-term interest rate in Japan dropped below 1 percent, which should be good news for people in the housing and construction business, not to mention potential homeowners. The reason is less encouraging. Because the US economy continues to be sluggish, more people are purchasing Japanese government bonds and yen.

Consequently, the government will reduce the interest rate for Flat 35 housing loans starting in August, which are government-supported mortgages for between 21 and 35 years. Depending on how many years your mortgage is for, the interest rate will be from 2.3 to 3.2 percent, which compares to about 4.6 percent in the U.S. right now.

Though this development will certainly spur home purchases, it would be better if savings interest rates weren’t so low and salaries were rising. As it is, a lot of people just don’t have enough faith in the future to sink everything they have into a house or condominium.