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Flat rates, softening market

By Holden Lewis · Bankrate.com
Wednesday, April 21, 2010
Posted: 9 am ET

If it's Wednesday, this must be the day when Bankrate conducts its weekly mortgage rate surveys. Last week, the average rate on a 30-year fixed was 5.21 percent. It won't be much changed from that this week, based on yesterday's mortgage bond prices and yields.

According to the Mortgage Bankers Association, applications for refinances and for purchases were up last week. The MBA's economist says refinancers locked rates when they dipped last week. I don't remember that dip, but there has been an increase in intraday volatility, so maybe there's something to that explanation. The MBA attributes the increase in purchase applications to the homebuyer tax credit, soon to expire.

Paul Descloux, proprietor of the analytics shop Mortgage Maxx, doesn't see a rebound in refinancing, and he doesn't think home sales are gonna go gangbusters anytime soon, either. "The MAX keeps pointing to a softening housing market despite friendly seasonals and the largess of both the Fed and the feds," Descloux writes in his weekly report. Although "The MAX" sounds like his superhero alter ego, it's merely the name of his weekly report.

I'm growing ever more pessimistic about housing, and I never was optimistic to begin with. Well, I haven't been optimistic about housing since 2003, to be accurate. We will promote the general welfare if we go ahead and let foreclosures happen, while at the same time treating renters and homeowners the same taxwise, and encouraging investors to become responsible landlords.

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