Freddie Mac reported 30-year fixed mortgage rates averaged 4.39% with an average 0.8 point for the week ending Aug. 4, down 16 basis points from last week.

This is the lowest it has been for 2011, and 22 basis points above the record low of 4.17% recorded in mid-November 2010.

Credit Suisse analysts projected that the Refinance Index could increase to 3400 from the 2784 area it reported at for the week ending July 29.

The 22% jump, however, is not particularly impressive for the rate level and analysts anticipate a 15% weaker prepay response this year versus last. Credit Suisse analysts, like many others, cited a rate of closer to 4% as needed to pop the Mortgage Bankers Association's Refinance Index to reach the 5000 high recorded in 2010. Meanwhile, UBS analysts projected a 3.80% is needed to get the index to this level.

Deutsche Bank Securities analysts do not believe that primary mortgage rates will make it through 4% as mortgage originators will be flooded with applications to refinance given the sizeable amount of outstanding loans just below 5%.

The 15-year fixed mortgage rates also experienced a sizeable 12-basis-point decline to 3.54%, while adjustable mortgages were mixed. One-year ARMs rose seven basis points to 3.02%, while 5/1 hybrid ARMs declined seven basis points to a new record low of 3.18%

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