And This Is a Bad Thing?

Low interest rates aren't spurring home sales because of stringent lending requirements. I don't see bad news in all that. It means that people are being checked to see whether they have the capacity to repay their obligations and banks are doing the job they should have been doing all along.

An odd scene has been playing out lately in the offices of mortgage brokers and bankers around the country.

Mortgage rates have sunk to levels not seen in more than a half-century — a seductive 4.58 percent for an average 30-year fixed loan. Yet brokers and lenders report not a flood but a trickle of customers.

So what's going on?

Call it a tale of the haves and have-nots.

The haves are those who stand to save money from refinancing and have the financial standing to do so. Since mortgage rates have been low for so long, most of them already have refinanced in the past 18 months. Doing so again wouldn't be worth the cost for most.

The have-nots? Those are the millions of Americans pummeled by the housing collapse. They have little or no home equity or no money for down payments. Or they lack the credit or steady income to get or refinance a mortgage.

The result is that brokers like Ginny Ferguson are filling their days doing something other than handling a stampede of customers buying homes or refinancing.

Ferguson, CEO of Heritage Valley Mortgage in Pleasanton Calif., has managed to stay busy: She's archiving files, reviewing marketing plans and calling previous clients and agents to try to drum up business.

It means that home sales aren't recovering to their pre-boom levels, which is continuing to cause consternation among the so-called experts who want to see home sales recover as part of the leading edge of the economic recovery.

The situation also means that people can't afford to refinance because their properties remain underwater and/or can't afford to move even if it is downsizing because their liabilities exceed their assets.

Some of the experts think that the strict lending requirements have gone too far and limited economic growth. The solution to the ongoing real estate market isn't to revert to the very ways that led us down the path to a real estate bubble. The market needs time to recover in an orderly fashion and that just takes time.

The homeowner tax credit accelerated sales among qualified buyers from one fiscal quarter into another. It didn't create additional demand and additional sales. Allowing homeowners who were already in the process to obtain the credit even after the June 30 deadline isn't going to spur additional sales - it's merely going to spread money around among those who are already spending it.