Freddie Mac reported new record lows set on 30- and 15-year fixed mortgage rates as well as on one-year ARM rates for the week ending May 3.

The 30-year fixed averaged 3.84%, down four basis points from last week and three basis points below its previous low recorded in February.

With the no-point rate at just over 4.0%, borrowers underlying 4.0% and some 3.5% coupons have an incentive to refinance. This may provide a modest boost to refinancing activity in next week's Mortgage Bankers Association (MBA) report.

Yesterday, the MBA reported the Refinance Index slipped 0.7% to 3688 for the week ending April 27 with the decline coming solely from conventional applications.

Meanwhile, 15-year fixed mortgage rates dipped five basis points to 3.07% and is four basis points under its previous low; 5/1 hybrid ARM rates were unchanged at 2.85% (seven basis points higher than its recent 2.78% low), while one-year ARM rates averaged 2.70% from 2.74% previously and two basis points under its previous low.

In its first quarter financial report, Freddie Mac said that given the current outlook for the economy for the remainder of 2012, they expect interest rates on fixed-rate, single-family loans will remain historically low.

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