Pending Sales of U.S. Existing Homes Decline by Most in a Year

[cthulu2016]

3. Mortgage rates are too high

Lest anyone counter with they are the lowest they have ever been... in nominal terms that is true.

But if 3.9% was such a great mortgage rate then more people would be buying houses.

The Fed has been up against zero for ages now, but that doesn't mean the Fed rate is supposed to be zero. It is supposed to be about negative 4% but cannot be because it can't go below zero. (Meaning that in light of unemployment and GDP and inflation numbers the Fed would have cut an additional 4% if they had had it to cut.)

And that deforms all credit. All interest rates are about 4% higher than they should be.

The "fair" mortgage rate that would fix the housing market is about 0%. It can't happen, since no bank would lend at 0%, but that is what it would take.