The 30-year fixed mortgage rates declined for the second straight week to 3.55% from 3.59% in the week ending Sept. 6, reported Freddie Mac in its weekly Primary Mortgage Market Survey.

Rates have dropped 11 basis points over the past two weeks and are within six basis points of July's record low 3.49%.

While the improvement may stimulate refinancing activity this week, it should be limited given that new historical low levels were being set regularly since May through July and remained historically attractive even in the recent "spike" higher.

Some extraneous influences, however, in the next report from the Mortgage Bankers Association (MBA) will be the Labor Day holiday and possibly a rush by some laggards to refinance before higher g-fees take effect on Dec. 1. Given the long closing times, that window could be shut by the end of the month or even sooner.

For the week ending Aug. 31, the MBA reported the Refinance Index declined 3.0% to roughly 4217, its lowest level since early May.

Meanwhile, 15-year fixed rates were unchanged at 2.86%; 5/1 hybrid ARM rates slipped three basis points to 2.75%, while one-year ARM rates set a new historical low of 2.61%, down two basis points from last week.

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