Monday, September 18, 2006
From Inman News:
Long-term interest rates are sitting on a six-month low, the 10-year T-note at 4.75 percent and low-fee 30-year mortgages at 6.5 percent. The reasons that these rates are so low are not the widely advertised pre-recession or housing collapse.
Aside from improving the inflation outlook, the big drop in energy costs will relieve household budgets. As is, consumption has not faltered much: August retail sales were forecast to decline and instead rose.
Housing is slowing, no question, its past stimulus fading to nil, but housing trouble will not exert drag unless waves of foreclosures result in a price spiral. The newest foreclosure and loan-delinquency data do not support the scare headlines, and there is widespread misunderstanding about the process of a housing slowdown.