European debt concerns also riled the market, staving off a hike in mortgage rates, according to Frank Nothaft, vice president and chief economist for Freddie Mac.
The 30-year, fixed-rate mortgage dropped to 4.15% from 4.32% a week earlier and 4.42% last year. Nothaft said 30-year, fixed mortgage rates are at their lowest levels in five decades.
Meanwhile, the 15-year, FRM hit 3.36%, down from 3.50% a week earlier and 3.90% last year. In addition, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.08% this week, down from 3.13% a week earlier and 3.56% a year ago, while the one-year Treasury-indexed ARM averaged 2.86%, down from 2.89% last week and 3.53% last year.
The low rates kept refinancing activity high. In the first half of 2011, refinancing applications represented nearly 70% of all mortgage activity.
Bankrate attributes the record low interest rates to “weakness in the U.S. economy and the accompanying demand for Treasury securities.”
According to Bankrate’s survey, the 30-year, FRM hit 4.45%, down from 4.46% last week, while the 15-year, FRM hit 3.58%, down from 3.61% a week earlier.
The 5/1 ARM fell to 3.15% from 3.24% a week earlier.
by KERRI PANCHUK