How Low Can Mortgage Rates Go?

I refinanced the mortgage in my Chicago real estate a year ago and got an outstanding rate of just over 4.00 percent on a 30-year loan. I felt lucky, since rates at the time were closer to 5 percent than 4.
A model house on a pile of 1 cent coinsHere we are a year later, and today’s mortgage rates are starting to make me think about refinancing again.
Freddie Mac released its Primary Mortgage Market Survey on Thursday to show that the 30-year fixed-rate mortgage has dropped to yet another all-time record low, coming in below 4.00 percent for the seventh straight week.
Here’s the breakdown for the week ending January 19:
*30-year fixed-rate mortgage (FRM): Averaged 3.88 percent, down from last week when it averaged 3.89 percent. Last year at this time, the 30-year FRM averaged 4.74 percent.
*15-year FRM: Averaged 3.17 percent, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.05 percent.
*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 2.82 percent, matching last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 3.69 percent.
*1-year Treasury-indexed ARM: Averaged 2.74 percent, down from last week when it averaged 2.76 percent. At this time last year, the 1-year ARM averaged 3.25 percent.
Frank Nothaft, vice president and chief economist for Freddie Mac, said rates remained stable despite a mixed bag of economic data reports.
“On the consumer front, retail sales edged up only 0.1 percent in December, but the Reuters/University of Michigan sentiment index continued to climb in January to the highest reading since February 2011. On the business side, industrial production rose 0.4 percent in December, slightly below the market consensus forecast, and the core producer price index rose faster than market expectations. Finally, on the home construction front, builder confidence rose for the fourth consecutive month in January to the highest level since June 2007.”
Regardless of the economy, it seems other homeowners are on the same page as me and are taking advantage of record-low mortgage rates. The Mortgage Bankers Association released its Mortgage Applications Survey for the week ending January 13 to show that mortgage applications increased 23.1 percent from the prior week.
Of that mortgage activity, home refinancers accounted for 82.2 percent of all the applications to mark the highest refinance share since October 22, 2010.