Mortgage rates remained historically low

Mortgage rates remained historically low over the past two weeks, keeping housing very affordable, said Frank Nothaft, Freddie Mac vice president and chief economist.

As a result, mortgage applications leapt 17 percent over the week ending September 4, led by a 23 percent jump in refinancing demand, according the Mortgage Bankers Association. In fact, nearly three out of five applications were for refinancing current loans.

While the economy lost 216,000 jobs during August, it was the smallest monthly job loss since August 2008. This and the Federal Reserve's latest Beige Book suggest that the economy may be on the road to recovery. (I tend to believe we will have another crash before a true recovery.)

Based on information up through late August, most Federal Reserve Bank districts noted that their business contacts remained cautiously positive that economic activity was stabilizing in July and August. Two out of the 12 districts also indicated that local house prices were firming.

Paul