Interest rates fall again, but does anybody care?

Interest rates are at or near 50-year lows, but mortgage refinancing applications fell again last week.

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    In this July photo, a "For Sale," sign is displayed outside a home in Springfield, Ill. Despite interest rates near or at 50-year lows, home buyers aren't snapping up properties and refinancing among homeowners has fallen for the third week in a row.
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Interest rates on mortgages are at or near 50-year lows, but that's failing to ignite much enthusiasm among homeowners or home buyers.

The number of homeowners refinancing their property fell last week for the third week in a row, according to the Mortgage Bankers Association. The MBA's refinancing index was down 0.9 percent (adjusted seasonally to take account of the Labor Day holiday the week before).

The number of home buyers applying for a mortgage also fell 3.3 percent from a week earlier, according to the MBA's adjusted purchase index.

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These decreases come despite declines in interest rates for 15- and 30-year fixed-rate mortgages. The average rate for a 30-year mortgage edged down to 4.44 percent last week, with points (additional costs of the loan including the origination fee) falling to 0.8 percent.

The 15-year rate fell as well from 3.96 percent to 3.86 percent last week with points down to 0.9 percent of the loan. The MBA said the 15-year rate is at the lowest level its ever been since the organization began surveying rates, matching the rate for the week ended Aug. 27. Other data suggest thta interest rates are near lows not seen since 1956.

One reason for the declines in refinancing may be that homeowners believe that interest rates will go down even more. On Tuesday, the Federal Reserve said it was ready "to provide additional accommodation if needed to support the economic recovery." In the past, its accommodating moves brought down mortgage rates.

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