With everyone hoping for the FED to lower the mortgage rates they dont see that it is backfiring.
The market has been going up because of FED speculation of lowering the discount rates.
If anyone noticed the 10yr bonds went up causing the mortgage rates to go up as well.
The last time the FED dropped the rates was Aug 17.
The market has been going down due to over 20 mortgage lenders filing bankruptcy, job losses, etc. The mortgage rates were dropping, but the FED's decision actually spiked the market.
http://freddiemac.com/dlink/html/PMMS/display/PMMSOutputYr.jsp?year=2007
Shows the last week with the mortgage rates creeping back up.
With the rates dropping we will have more consumers spending. Consumer spending drives the market up, and this means less investors investing into 10yr bonds.