Thursday, Aug. 21
Posted 2 p.m. EDT
DIP: A little history: The last time Bankrate's benchmark 30-year mortgage rate was 6.66 percent, it went up the next week. But not by much. In our Aug. 8, 2007, survey, the benchmark rate averaged 6.66 percent, and the next week it went to 6.68 percent.

GOOD-BYE TO DPA: The countdown clock has begun on seller-funded down payment assistance programs, Marcie Geffner writes today. These programs allow home sellers to indirectly fund buyers' down payments. The recently passed housing law bans these things after Oct. 1. But they might rise from the dead, Geffner explains.

SEVEN PEOPLE, TWO HOUSES: On Tuesday we heard from a woman whose plight, I suspect, is not unusual. She and her fiance each own a small ranch house in Michigan. Their credit scores aren't very good because of divorce-related issues. They're upside-down on their houses and they want to get married and live together in one house as a blended family of two adults and five children. But how do they accomplish that goal? Should they walk away from their houses and their mortgage obligations? I invited readers' suggestions.

I got a couple of useful responses.

Ruth advises: "Both move into the biggest house, do a garage conversion if necessary for space, and rent out the other place. At least then they'll have some money coming in to help cover the mortgages. And HANG IN THERE! Eventually the market will cycle upward again. Look to the long term and just hang on!"

Erika writes: "They should consider renting out their homes and renting a larger one together. Where we live in Atlanta, the larger homes rent for MUCH less than any mortgage for that home would be and the less expensive homes tend to rent closer to the mortgage amount. With so many homes sitting empty, there are many people willing to rent."

I wonder if the same dynamic presents itself in Michigan? I doubt it, but it depends on the local market.

Tuesday, Aug. 19
Posted 11 a.m. EDT
PRICES: Wholesale prices jumped 1.2 percent in July compared to the previous month, according to the Labor Department. Excluding food and energy, wholesale prices went up 0.7 percent last month. They rose 9.8 percent compared to the previous July.

These numbers are higher than most economists and investors had predicted. Expect mortgage rates to rise, as they tend to do when inflation threatens. Look for people to start talking about a Fed rate hike sooner rather than later. Last week's Consumer Price Index was down from the previous month, but still higher than the Fed would like to see, ideally.

BACK TO REALITY: Housing starts tumbled in July to their lowest level since Ronald Reagan's second year in office. That's 26 years, if you don't want to do the math. Builders began construction on 641,000 single-family houses in July, down 39 percent from the previous July, according to the Census.

The decline in single-family starts was especially steep in the western states -- 44 percent. The smallest year-over-year drop was in the northeastern states, at 27 percent.

Overall housing starts, including multifamily dwellings, fell to 965,000 units in July, a 30 percent decline from the previous July.

I peg this as good news. Builders are returning to reality. Few people are buying houses, so fewer are being built. An exception is my town, where block after block of new town houses and McMansions sit empty, yet large new tracts are being built. They cleared a multi-acre tract of palmetto scrub just last month and are starting to grade streets. I suppose the developer worries that the price of construction materials will rise in coming months and years, so why not build soon-to-be-empty dwellings now?

The drop in housing starts is the beginning of the end of good news for buyers, especially first-time buyers. Eventually, the supply of houses will more closely match demand, and prices will stabilize. But that won't happen for a while in most metro areas.

TO THE POINT: I like brief questions from readers. Here's one, from a reader named Nirmal: "I signed a contract for a new home and I would like to know what will the interest rate be next year of June-July of 2009?"

Nirmal, I would love to know what mortgage rates will be like a year hence. It would be valuable information. My guess is that mortgage rates will be higher. We're entering a period of political uncertainty, we're running huge budget deficits, oil prices remain high, and prices are rising quickly. That implies higher rates a year from now, I believe. How much higher? I won't guess.

CONUNDRUM: I can't think of a good answer to the following question, and I'll throw this one to you. Do you have a suggestion? Let me know at hlewis@bankrate.com. The core of this problem is contained in the last sentence: How does this couple unite in a blended family in one house?

Friday, Aug. 15
Posted 2 p.m. EDT
STEADY: This has been a relatively tranquil week for mortgage rates. They haven't varied much. In Bankrate's weekly survey, the 30-year fixed was unchanged from the previous week at 6.74 percent. That's about where it stands now.

ANGUISH: A reader named Marilyn e-mails that "I can't find anyone to take a chance on me to let me get a place of my own." She and her husband have rented the same place for at least 15 years, and they have steady jobs. She has saved money for a down payment on a home. She adds: "My credit has gotten really bad, but things have happened I could not control. I still am making payments but just need to get caught up and I will eventually."

Marilyn writes:

I don't know Marilyn. Maybe she talks a good game, but never follows through on her promises. But that's not the impression I get from this e-mail. She says she has had her job for 11 years and her husband has had his job for 19 years. She doesn't sound flaky.

Marilyn wanted to buy a manufactured home and the land under it, but she couldn't get approved for a loan because of a poor recent credit history. The housing bill, which was passed last month, will help people in situations similar to hers.

A few years ago, there was a meltdown in the business of lending money for manufactured homes. Lenders became overcautious. It didn't help that the FHA wouldn't insure a loan of more than $48,000 on a manufactured home. That limit had been in effect since 1992. The new law raises that limit to $70,000, and the limit is indexed to inflation.

The limit was raised to accommodate higher prices for land and manufactured homes. Another reason for raising the limit was to allow more people to buy double-wide homes instead of single-wides.

The law directs Fannie Mae and Freddie Mac to come up with new loan products and flexible underwriting standards for manufactured homes. That should help people such as Marilyn, too.

The FHA is geared to help people with troubled credit histories. After Marilyn catches up on her delinquent payments, she might be able to finally buy a home. That was Congress' intention.

Thursday, Aug. 14
Posted 4 p.m. EDT
SPLITSVILLE: Falling home values and sluggish real estate sales are making it even more difficult to go through a divorce, Elizabeth Razzi reports for Bankrate. Couples aren't fighting to keep the house; they're fighting to burden the ex with the house.

The sad thing about this is that the bad housing market probably pushes some vulnerable couples into divorce in the first place. Bad economic times always have that effect.

SPLATSVILLE: House prices continue to fall, according to the National Association of Realtors. Wait till you see what prices did in Sacramento.

Prices fell in all of the 10 most populated metro areas -- even Dallas-Fort Worth, which, unlike other places, didn't have a ridiculous jump in prices during the bubble years. Only a few major cities, mostly in Texas, eked out price increases. The biggest price increase was in Yakima, a city in the heart of Washington's wine country.