"The idea is nonsense," Glick said. "It's all about jobs and consumer confidence. I made more loans when the rates were 9 percent because the economy was better. People shouldn't play around."
Williams agreed that jobs, not rates, mattered more.
Davidow said that she had sold more when rates were at 8 percent than at 6 percent, and that the difference was consumer confidence.
That magic number didn't materialize in 2009. Onetime Bankrate.com columnist Holden Lewis said 4.5 percent was false from the start, a "self-serving notion" pushed by the National Association of Realtors and the National Association of Home Builders.
"I don't understand why people took this seriously and why people think the idea came from the Obama administration," Lewis said. "I mean, if the National Dairy Council tried to persuade the Department of Agriculture to buy one ice cream cone a day for every resident of the United States, I doubt anyone would take it seriously, and I doubt people would think that the idea came from the agriculture secretary.
"However," he said, "the ice cream idea would be cheaper and tastier than bringing mortgage rates down to 4.5 percent."
Rates have dipped since then, reaching 3.9 percent in early October, and still the real estate market is stuck. Unemployment remains high, mortgage money remains tight, few people actually got a 3.9 percent rate anyway, and even refinancing into low rates continues to be difficult for many.
Low interest rates are, of course, a product of the current economic malaise, not a means of solving it. The worse the economy appears to get, the more investors pull their money out of the stock market and buy more secure Treasury bonds, which determine interest rates.
Fixed rates could drop to 1 percent, and no one but higher-end buyers with impeccable credit would be able to get them.
Unfortunately, there aren't enough of those buyers around. As The Inquirer's Home Price Survey showed a few weeks back, without less-well-heeled first-time and repeat buyers, the real estate market will just run in place, and values will drop.
I've been writing about real estate in the Philadelphia region since 1989, and it seems to me that in half those 22 years, I was covering bad markets. But there's one story about rates I always find myself returning to.
I wrote it in January 1994. Interest rates had been below 7 percent for the preceding four months, and that had inspired considerable refinancing activity by borrowers trying to improve on mortgages they had gotten at 12 percent or higher.
Every expert I interviewed back then - only one of whom is still in the job - saw fixed rates rising to 7.75 percent in 1994, but each said that meant the economy was on track, and that buying a house would not be a bad idea.
Only one disagreed, saying rates would likely fall to under 5 percent that year.
He ended up being correct - 17 years too late.
"On the House" appears Sundays. Contact Alan J. Heavens at 215-854-2472, firstname.lastname@example.org or @alheavens at Twitter.