Freddie Mac reported new record lows hit for 30- and 15-year fixed rate mortgages and 5/1 hybrid ARMs for the week ending June 24.

The 30-year fixed rate lows fell six basis points from last week to 4.69%.  The previous low was 4.71% hit last December.

Meanwhile, the 15-year fixed rate mortgage declined to 4.13% from 4.20%, and 5/1 hybrid ARMs averaged 3.84%, down five basis points. 

The one-year ARM rates also dropped five basis points to 3.77%, which is its lowest level since early May 2004. 

Despite historically attractive rate levels, refinancing response is expected to remain mute. 

Under traditional incentive measures, 73% of the 30-year mortgage universe would be refinanceable at these rates, Credit Suisse analysts said in research released today. 

However, as a result of higher refinancing costs and tight credit standards, it reduces the population to just 37% that has an incentive.  They believe that the current refinance trigger is a 4.50% mortgage rate/2.80% 10-year yield.

Anish Lohokare from BNP Paribas calculated that, based on the sensitivity of primary mortgage rates to the current coupon and the 10-year note, the 10-year note would have to drop to 2.50% to achieve a 4.5% mortgage rate.

Still, he added that refinancing may gradually step up as mortgage rates come off.

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