Freddie Mac's weekly mortgage rate survey reported new record lows set for 30- and 15-year fixed-rate mortgages as well as 5/1 hybrid ARM rates. 

The 30-year rates averaged 4.27% with an average 0.8 point, down five basis points from last week. This places the no-point rate at 4.47% and gives 4.5% coupons — which have underlying borrowers with strong FICOs and LTVs — a decent incentive for refinancing.

Refinancing activity, which has been muted since the end of August, may become more responsive with a new record hit. 

For the week ending Oct. 1, the Refinancing Index slipped 2.5% to ~4180. In late August, the index hit 5085 as mortgage rates averaged 4.32%.

At the same time, mortgage bankers are still experiencing capacity constraints, the economy and jobs market remain weak, while the prospect of even lower rates as a result of a second round of quantitative easing might encourage borrowers to wait before refinancing.

These alll suggest a modest response for refinancing activity despite record low rates.  However, rate levels should keep speeds, at the very least, around current levels on 5s and under. 

Freddie Mac also reported 15-year fixed mortgages fell three basis points to 3.72%; 5/1 Hybrid ARMs declined five basis points to 3.47%, and one-year ARM rates averaged 3.40%, an eight basis point drop from last week.

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