For the week ending May 16, Freddie Mac reported that mortgage rates hit new record lows. The 30-year fixed mortgage rate fell to 5.45%, down 13 basis points from last week. The previous record low was 5.61% set in March. The 15-year fixed rate mortgage rate reported in at a record low of 5.84%, compared with 4.97% last week. The previous record - also set in March - was 4.93%. Finally, the one-year ARM rate was essentially unchanged at 3.68% versus 3.67%, which is a record low.

The media effect has started and could help lift the Mortgage Bankers Association's (MBA) Refi Index to a new record high in the next report. Lehman Brothers says it expects the MBA Refi Index to average 9000 in the coming weeks as rates hold at or near record low territory.

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