As has been mentioned for quite some time, given economic issues around the world, at this time most economists don't believe that our economy can handle higher rates until 2011. In fact, the bond market has priced in slower growth and lower inflation over the next 12-18 months, and some believe that the Fed's first overnight rate hike won't be until the 2nd half of 2011. And if you like the yield on the 10-yr near 3%, you should be in luck since smarter minds than mine think it will sit here in the autumn, and mortgage rates right along with it. But in spite of low rates, the housing market is pretty stagnant. Mortgage purchase applications are down 41% from their peak in April, although apps to refinance are up about 33% from their low May levels.

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