Thx for the info. It turns out that normalcy is around 3000, and currently it's around 2000. Comparisons with 2009 seem redundant.

I wouldn't call it redundant, because it's a useful way to see how the homebuyer tax credit affected buying trends. But 2009 certainly was not a normal year.

I hate to say it, but if home sales are declining during the "peak" buying season since the tax credit ended, it does not look too good for the fall and winter (dead season). I suspect that there will be less buyers in the market during those months unless prices drop significantly to spark interest. Current interest rates won't drive sales. Rates have been low for so long now. The only way rates will be an impact is if they drop to 3.5% or lower, which I doubt will happen but still a possibility.

One thing I have noticed however, is that rates tend to be higher in the summer and go down around the holidays. If this holds true, it is a possibility rates could dip even further especially after the Fed announced they are going to start selling the mortgages they purchased to start buying Treasuries. That could result in lower rates so we could see another refi boom as well if that were to happen. I see this being a possibility so homeowners have more disposable income to spend more money during the holidays. Retail sales have been weak as of late and this could be a way to "stimulate" the economy. I don't agree with it, but it could happen.

Just as consumers will pay a premium to leverage an anticipated appreciating asset, they will demand a discount to do the opposite. Under current interest rates we're already seeing some areas where your PITI can total to less than comparable rents. Expect more of this.

And as far as using the Federal Reserve's Xerox machine to buy Treasuries....told ya so. I called this a few months ago and put it in print on ths blog. Fannie and Freddie are backstopped by Treasury, so no need to monetize MBS's, you just allow Fannie and Freddie to issue below market rates, bill the taxpayer (Treasury) and then Xerox (print, monetize, or quantitative easing) the difference. Conduct this mischief atop the contractionary forces of debt destruction, and you can even hold the broad money supply and price levels steady while you're doing this. You just avoid the deflation that would have raised the average working man's real wage and continue to deny the median hourly worker the progress gains he's been due for the last 40 years. How to rob a man blind without him even knowing.

It's OK, the ruling class tells us we need positive inflation at all costs and that deflation will lead to us all wearing barrels with suspenders and eating ketchup sandwiches. They know best, we should listen to the experts on these matters.

Sorry if redundant read harsh. If comparing to 2009, the conclusion appears to be that it would have been really bad without the credit.

Ronnie, that sure seems to be the case.

Ergo, stimulation of the market was unavoidable.