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