A lot of the starter homes are on the smaller end, a little bit older.

Acceleration in U.S. growth and rising energy costs will likely translate into higher long-term [interest] rates.

Every once in a while the bond market does believe Greenspan.

The bond markets got a little ahead of themselves, causing yields to rise too quickly over the past few weeks. This week saw a bit of a correction and mortgage rates fell for the first time in eight weeks. Continued volatility in financial markets, however, will keep rates teetering up and down for some time to come.

The 30-year [fixed-rate mortgage] came in under 6 percent for the last 22 weeks of this year. As a matter of fact, mortgage rates in 2004 averaged around 5.84 percent, the second lowest annual rate ever recorded in the history of Freddie Mac's Primary Mortgage Market Survey.

Last Friday's unexpectedly weak employment report caused interest rates on long-term Treasury bonds and, by extension mortgage rates, to fall as investors worried about the health of the U.S. economy.