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Record-low mortgage rates

30-yr fixed mortgage rates have never been lower than they are today, thanks to record-low yields on Treasuries, a weak housing market, and plenty of loanable funds sloshing around the world's capital markets. For all those who can qualify for a refi, this is one more opportunity of a lifetime.

Refinancing activity understandably has surged in recent weeks and is likely to continue, though it seems unlikely we'll exceed the high that occurred in late May 2003 (see above chart of the Mortgage Bankers' Association Refi Index, whose latest value is 3915). That high occurred thanks to a plunge in 10-yr Treasury yields to almost 3%, which in turn was driven by the market's belief that the economy was mired in a jobless recovery. As history buffs will recall, the Bush II tax cuts were passed in June '03, and the economy subsequently staged a surprising recovery which vaulted 10-yr yields back up to 4.6% by the end of the summer. It would be wonderful to see history repeat itself.

UPDATE: Mark Perry has a collection of other interesting mortgage-related statistics here.

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