Good economic news all week long had mortgage rates headed for an up-side blowout until rescued by today's word of zero change in November's Consumer Price Index. Do not be misled: for long-term mortgage rates to hold near 6 percent -- let alone decline further -- the economy has to sink, and that is not what it is doing. The killer this week was retail sales, up a solid 1 percent in November, and October revised up. Then came word of falling applications for unemployment insurance and a surge in applications for new purchase mortgages -- the first real gain in a year, up 15 percent in just three weeks in a usually quiet season. The basis for belief in a substantial economic downturn, Fed easing, and justification for a 4.5 percent 10-year Treasury and six-flat mortgages has been housing...
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