From the State of the Union to the State of the Mortgage Market - President Bush must have a big smile on his face this morning as he looks at the latest weekly mortgage numbers.

Mortgage applications to purchase a home hit an ALLTIME high, and refinancing applications surged more than 50 percent last week!

Again, it's the magic of low rates: the 30-year fixed mortgage fell to 5.55% last week as the U.S. government bond market rallied and yields fell (mortgage rates loosely track the 10-year note yield).

Unfortunately for the President, he doesn't control interest rates directly. And some are arguing that our big fat budget deficit is getting ready to push long-term rates sharply higher.

But as my mom always says, I'd rather be lucky than smart.

And right now Mr. Bush is benefiting from policies that the Federal Reserve has followed for years of stamping out inflation.

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And he also benefits from the intense global competition that robs U.S. firms of pricing power, and helps keep wages low BUT also keeps inflation from heating up and forces us to be super efficient.

Consumers are voting with their pocketbooks right now in favor of attractive mortgage rates and new homes.