Last week, we reported that the national averages on mortgage rates would likely move higher after the Federal Reserve's pronouncements on quantitative easing and interest rates. That's exactly what happened: Rates across the board were up on most mortgage products in most markets, according to the latest surveys from and Freddie Mac .

Rates, though, have actually eased somewhat over the past day or two. Recent action suggests that rates could remain sedate into the immediate future. This lack of volatility would be welcomed, because more borrowers would lose interest in interest-rate speculation.

In turn, we would like to see more borrowers take advantage of today's placid mortgage-rate environment. Cash has been king in recent years, but we don't view that as a positive.

In our opinion, mortgage financing leads to a more stable housing market. We say that because mortgage financing has historically been tied (leaving the early 2000s aside) to consumer fundamentals: income, debt-to-equity ratios, credit ratings, and realistic appraisals all help to perpetuate a fundamentally sound market.

What's more, when a high majority of homes are purchased with sound mortgage loans, it's virtually impossible for home prices to wildly detach from end-user fundamentals. In other words, home prices don't rocket toward the stratosphere, nor do they plummet into the abyss. Prices tend to move predictably, which, in turn, encourages more buyer and seller participation.

We are obviously somewhat biased in our affinity for mortgage lending, but our argument has merit, and it's one few market commentators have considered. Perhaps they should.

 Courtesy of Jessica Regan.

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