Climbing Out of the Basement

The once bleak outlook for American housing is rapidly growing brighter

Anne Feltus and Mark McFarlane had looked long and hard for an affordable house in Houston, but the task seemed almost hopeless. Then in midsummer, interest rates suddenly went into free fall. Now the engaged couple is buying a two-bedroom house that will cost $873 a month in mortgage payments, fully $230 less than it would have before rates fell. Says Feltus, 34, who works in public relations for Exxon: "That was quite a saving."

Delighted home buyers have been swapping such tales from Boston to Berkeley as the three-year-old log jam...

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