Mortgage rates fall to new lows (again)

It happened again: mortgage rates hit new lows this week, according to Freddie Mac's latest Primary Mortgage Market Survey (PMMS) released Thursday.

Frank Nothaft, vice president and chief economist at Freddie Mac, attributes the decline in mortgage rates to the economy:

"Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections," Nothaft writes. "The Gross Domestic Product (GDP) rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat."

"One bright spot, however," Nothaft notes, "was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent."

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According to the PMMS, all mortgage products except the one-year adjustable rate mortgage (ARM) averaged new lows.

Rates for the week ending February 2, 2012 are as follows:

30-year fixed-rate mortgage (FRM) averaged 3.87 percent, down from 3.98 percent last week and 4.81 percent one year ago.

15-year FRM averaged 3.14 percent, down from last week's 3.24 percent and last year's 4.08 percent.

5-year Treasury-indexed hybrid ARM averaged 2.80 percent this week, down from last week's average of 2.85 percent. One year ago, the 5-year ARM averaged 3.69 percent.

1-year Treasury-indexed ARM rates rose slightly to 2.76 percent, up from last week's average of 2.74 percent. One year ago, the 1-year ARM averaged 3.26 percent.

Lower rates are great for existing or first-time buyers looking to purchase a new home. But with low consumer confidence, stubbornly high unemployment and many would-be homeowners feeling strapped for cash, it's hard to see these rates doing much more to stimulate the housing market.