Diana Olick: Mortgage applications down 9.6% this past week, How about a Ginsu Knife?

17 days left for the U.S. government's $8,000 first time homebuyer tax credit and yikes, mortgage applications are down 9.6%. Interest rates actually ticked down to 5.17% from 5.31% and yet the volume is dropping. What could it be?

Maybe the pool of buyers has yet to find a job, maybe it’s because those that are working are not experiencing a wage increase? Maybe the potential buyers are concerned about keeping their job? Maybe the buyers are concerned about home prices have yet to truly "firm up"? Maybe many potential buyers simply moved in with mom and dad given the cheap rent as mom and dad are not making their mortgage payment and when they complete the short sale, they agreed to split the $1,500?

No, it is none of those crazy fundamental reasons, grandpa has it figured out; there is a lack of meaningful incentive. Clearly a 5% rate is not enough and no one is fretful about losing their job as if they do, congress and the administration will simply create another bailout program. The lacking incentive….

I WANT A SET OF KNIVES!!

"But wait, there's more..."