Average 15-year fixed mortage is even cheaper at 5.89%

The weekly survey by Freddie Mac finds the average 15-year fixed mortgage rate down slightly to 5.89% (from 5.90% last week.) This is still quite cheap.

The average 30-year fixed mortgage ticked down from 6.22% to 6.17%, which is also still dirt cheap.

The continued availability of relatively cheap mortgages will continue to keep the housing sector from falling off a cliff. We've blown off most of the speculative and low-quality mortgage demand, so we are mostly back to relatively high quality borrowers, where we want to be anyway.

We may have a bit more weakness to work through, but sometime within the next couple of months we should finally "turn the corner" and actually see a rise in demand for housing.

With a lot of the low-quality borrowers forced to seek or remain in apartments, even with a continued build-out of apartments, rents will likely be rising, giving high-quality renters a financial incentive to shift over to being homeowners.

-- Jack Krupansky