Freddie Mac's weekly mortgage rate survey reported new record lows for 30- and 15-year fixed mortgage rates in the week ending July 26. The 30-year rates averaged 3.49%, down four basis points from last week, with the no point rate at 3.67%. 15-year fixed rates averaged 2.80% versus 2.83% previously.

Despite new lows, refinance activity is expected to show a muted response though further gains would not be surprising. Yesterday, the Mortgage Bankers Association reported the Refinance Index increased just 2.0% in the week ending July 20 to roughly 5421 following a nearly 22% jump in the previous week as mortgage rates declined from 3.62% to 3.56% and then to 3.53%.

Meanwhile, ARM rates were higher with 5/1 hybrids up five basis points to 2.74% while one-year rates reported at 2.71% from 2.69%.

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