Long-term interest rates are finally beginning to respond to reductions in short-term rates: Last week, the rate for a 30-year conforming (conventional) fixed mortgage dropped 3/8% to 5.875%. For all rates that will prevail at the start of business on Monday, March 17, click here.
Perhaps the most important econews of the past week was that the consumer price index (CPI) was unchanged in February relative to January. Contained inflation gives the Fed the political cover to lower the short-term rate even more.
As you may have read in the newspaper, Congress is considering legislation to help stem the tide of foreclosures and stabilize the house market. Before they get around to it, though, wonderfully low interest rates might just spur the housing market to fix itself.