The mini boom in refinances fizzled quickly as interest rates crept back over five percent. At the same time, rising unemployment helped push homeowners into delinquency or foreclosure, setting a record for the number of homes in some stage of foreclosure during the first quarter of 2009. About 12.07 percent of mortgages were delinquent or in the foreclosures process in the first quarter.
All this bad news means Federal Reserve Chairman Ben Bernanke's efforts to lower the costs of mortgages and revive the housing market are stalling. Now that mortgage rates are over five percent, refinancings have stalled. "Housing is not going to be the engine to get us out of this recession," Robert Eisenbels, Chief monetary economist for Cumberland Advisers, told Bloomberg. "They've squeezed a lemon and now they're trying to squeeze some more, but you can only get so much juice out of a lemon."