The Fed rate voodoo seems to currently be working, with the latest scheme to buy back GSE-insured paper turning into falling mortgage rates nationwide, however briefly. Even California 30-year rates are down markedly, with Wells Fargo now below 5.6%.
Admittedly, many people won’t qualify for credit, or least fewer will than did two years ago, but it certainly beats the alternative of having a wave of reset-related defaults just as the economy falls off a cliff. Will people just default later as long rates rise in two years? Sure. But that’s then and this is now.