Slashing rates to 4.5% for new borrowers, as the government aims to do, won't be a panacea, either. Ivy Zelman, chief executive of housing-research firm Zelman & Associates, estimates that, even with such a low rate, only about 67% of U.S. households can afford a house. Homeownership was nearly 68% in the third quarter, according to the Census Bureau, implying there is virtually no untapped demand for homes.
The Wall Street Journal today:
With mortgage rates approaching record lows, the volume of applications filed for mortgages jumped a seasonally adjusted 48% last week from the previous week, according to the Mortgage Bankers Association's weekly survey.Applications for the week ended Dec. 19 ran 124.6% ahead of the mortgage activity seen during the same week last year, the Washington-based MBA said. Its survey covers about half of all U.S. retail residential mortgage applications.
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