Record-low mortgage rates: Who cares?

Mortgage rates recently hit record lows, boosting affordability for homes. If you even care.

After all, there's a limited pool of Americans who can take advantage. Many would-be buyers are worried about losing their jobs; now that the home-buyer tax credit has expired, they're even less motivated to take the risk of buying a place.

And some existing homeowners can't benefit because their lack of home equity prevents them from refinancing.

The 30-year fixed-rate mortgage averaged 4.58% for the week ending July 1, according to Freddie Mac's weekly survey of conforming mortgage rates -- the lowest since Freddie started keeping track in 1971. See Mortgages. Also, see story on lawmakers extend home-buyer tax credit deadline for some home buyers.

According to data going back even farther, the 20th century low was right after World War II, when the 30-year fixed-rate mortgage averaged about 4.7%, said Michael Larson, real-estate analyst with Weiss Research, citing the book "A History of Interest Rates," by Sidney Homer and Richard Sylla.

If the economy continues to flounder, 4% rates might not be out of the question, he said.

Lower mortgage rates improve affordability: The difference between a 6% and a 5% mortgage rate on a $300,000 mortgage, for example, is about $188 a month, said Greg McBride, senior financial analyst for Bankrate.com.

Still, no matter how low rates go, it's possible the economy's weak state will hinder potential home-buyers.

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