Mortgage rates are flat this morning, following a report that says housing starts plummeted in May.
Single-family housing starts fell 17 percent in May (PDF file) compared to April, according to the Census. "The government tried to prop up the construction sector and it worked," economist Joel Naroff comments in an e-mail. "But the incentives are gone and builders are telling us so is demand."
Naroff says the housing sector has helped lead the economy out of past recessions. That won't happen this time. It probably means that the Federal Reserve will keep short-term rates low for a long time -- and long-term rates will probably remain low, too.
And to think that, three months ago, I was convinced that the 30-year fixed would be around 5.75 percent by now. It's nearly a percentage point lower than that.