Mortgage rates continue to fall even lower. Freddie Mac reported its recent weekly survey shows the average 30-year fixed-rate mortgage fell to 3.91%, the lowest point in four decades and the sixth time a new low has been reached during 2011.

Adjustable-rate mortgages continue to adjust downward, as well. Freddie Mac said the five-year ARM average has declined to a new record low of 2.85%, while the one-year ARM has declined to 2.77%, also a new low. The 15-year fixed remained unchanged from one week earlier at 3.21%.

Rates are having some effect on home buying, but it is slight. The National Association of Home Builders said its survey showed a small two-point improvement in builder sentiment regarding housing starts. To date in 2011, sales of previously occupied homes are only slightly better than the anemic numbers reported in 2010.

Several analysts have predicted that the 10-year Treasury note will go even lower in 2012, and take long-term mortgage rates down with it.

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