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Maui Real Estate

Why are mortgage rates falling ?

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Freddie_Mac_pmms_1_8_15

OK, make sense of this: The U.S. economy in a strengthening recovery, the Fed is in hold-me-back mode, jobs-jobs-jobs everywhere … and long-term interest rates, including mortgages, have dropped as they would in a depression.

Right. Begin by stripping away three sources of confusion.

First the confetti cloud from Wall Street “analysts.”

Second, hold at a distance all commentary relying on a traditional business cycle, like all the ones after World War II.

Third, nobody knows with any precision what happens next, not in a situation without modern precedent.

Housing is MIA, flat. Traditional measures of affordability are off-chart high-side. Mortgages never got above 4.5 percent and are now under 4 percent again. Foreclosures new and old are way down. Absolutely inescapable: Something(s) is missing from purchasing power. Credit is too tight, but more important …Read More

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