The 30-year fixed mortgage rates set a new record low of 4.09% with a 0.7 point that equates to 4.265%, according to Freddie Mac's weekly survey. This is down three basis points from last week's record low of 4.12%.
While this should perk up refinancing activity, it looks to be a struggle for the Mortgage Bankers Association's (MBA) Refinance Index to reach a new high at this time.
Morgan Stanley analysts recently had expected the index to hit 4000 in the week ending Sept. 9 in response to last week's drop to a new record low rate as 53% of the mortgage universe has a decent incentive. Refinancing activity, however, increased just 6.0% to 3361.
For the record, the 2011 high so far is 3916 hit in mid-August, which is well below the 5000+ level hit in late August and again in early October 2010.
Freddie Mac also reported new record lows for 15-year fixed mortgage rates of 3.30% and for one-year ARM rates of 2.81%, both three basis points lower from last week.
Meanwhile, 5/1 hybrid ARM rates rose three basis points to 2.99%.