Freddie Mac reported that mortgage rates set new record lows the first week of September. Rates on 30-year fixed-rate mortgages averaged 4.12%; the lowest since 1971. That’s down from 4.22% the week before, and from a 2011 high of 5.05% in February of this year. Rates on 15-year fixed-rate mortgages averaged 3.33%, down from the 2011 high of 4.29%, which again was seen in February. That’s a new low in records dating to 1991.

Five years ago, the average 30-year fixed rate was near 6.5%. In 2000, it exceeded 8%. Rates on 15-year fixed-rate mortgages averaged 3.33%, down from 3.39% last week and a 2011 high of 4.29%, which again was seen in February

Over the past year, the average rate on the 30-year fixed mortgage has been below 5% for all but two weeks. The last time long-term rates were lower was in the 1950s, when 30-year loans weren’t widely available. Most long-term home loans then lasted 20 or 25 years.

But the low rates are not translating to a flood of loan applications. A survey by the Mortgage Bankers Association showed demand for purchase loans remained “at extremely low levels” with demand down 13.5% from the same week a year ago. The lack of demand is shown by the small amount of new loan applications. Refinancing requests accounted for 77.1% of all mortgage applications.

So the record-low rates have failed to energize the depressed home market. Joel Naroff, head of Naroff Economic Advisors, a strategic economic consulting firm, said “the housing market is not going to turn around because of [the low rates], because it isn’t the mortgage rate that matters”. Naroff blamed the “horrendous” process of qualifying for a mortgage despite tougher lending standards.

The experts had predicted that rates would rise slowly throughout 2011, but in fact the climb stopped in February. Nevertheless, once again the economists predict that rates on 30-year fixed-rate mortgages will rise the final 3 months of this year, and continue a gradual rise to an average of 5.2% during the fourth quarter of 2012.

If they are right this time, it could cost a lot more to borrow money in the future. And it just seems logical to assume rates have to up sometime. Low borrowing costs make acquiring a replacement or investment home a smart move. So if you were intending to make a move, why wait to when interest rates, as well as prices, get higher. Buy now and save!