Mortgage Rate Rally Continues

Turning a Corner??

Mortgage rates barreled lower a second straight day today, dropping from 5 5/8% to 5 3/8% for thirty year loans.

That brings the two-day drop to almost a full point, roughly equivalent to a 1,000 point rally in the Dow Jones average -- which, not coincidentally, is what the stock market gained the last few days.

While it's true that lower rates don't help homeowners with negative equity or wrecked credit, they're a boon for millions of other Americans.

Consider who benefits:

--Virtually overnight, prospective home buyers have 10% more purchasing power.
--Home sellers suddenly have a bigger pool of buyers who can afford their home.
--Existing homeowners with mortgages above 6% can refinance, using the savings to buy other things. In turn, strengthened consumer demand helps bolster an economy in recession.
--Banks and loan officers have a wave of new business to accommodate (I'd much rather see banks make money the usual way -- making loans -- than need bailout money from taxpayers).

Thanksgiving, indeed.