Mortgage Rates Reach All-Time Lows

Mortgage rates have hit an all-time low according to Freddie Mac's Primary Mortgage Market Survey. 30-year fixed-rate mortgages averaged 4.15% last week. 15-year fixed-rate mortgages averaged 3.36%.

The drop has done little to help new home sales, but it did cause a surge in refinancings. Frank Nothaft, the vice president and chief economist of Freddie Mac, said "Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter."

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One of the primary reasons for the drop is that mortgage rates are tied to government debt. The 10-year Treasury hit an all-time low of 1.99% Thursday. The previous record was 2.03%.

No matter how attractive mortgage rates are, they have not caused an increase in homes sales, and are not likely to. Many banks now require at 20% down payment for home loans due to fear that house prices are still falling and the the creditworthiness of many Americans is weak.

And, home prices have continued to drop rapidly. S&P Case-Shiller data show that the prices of homes in the the 10 largest and 20 largest cities are still falling. RealtyTrac reports foreclosures are down, but expects them to accelerate after lawsuits over robo-signing activity clear the courts. Banks still hold "shadow inventory" of homes upon which they have foreclosed but have not put back onto the market. This pool is estimated at as large as 3 million houses. That inventory will probably drive prices down
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further in the markets in which they are concentrated. And, of course, the unemployment rate is still above 9% and the total of unemployment and "under-employment" is nearly 17%.

Mortgages rates may be down, and may even fall further. That will not help the housing market one iota, at least for the time being.

CNNMoney Top 100 Places To Live 2011
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Mortgage Rates Reach All-Time Lows

Top 100 rank: 20
Population: 12,900
This former coal-mining town is a cyclist’s dream. Superior’s stunning mountain roads draw hundreds to the annual Morgul Classic bike race, and the town recently built a BMX bike park. Homes are more affordable here than in nearby Boulder, but residents have access to the same high-performing school district. Many of the city’s well-educated and affluent residents work in the tech sector, at Denver-area employers such as Oracle. --A.W.

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Top 100 rank: 19
Population: 37,200
With roots in mining and railroads, this affluent town offers an updated taste of the Old West. It boasts an historic downtown area, 265 acres of parks, and 44 miles of trails. Douglas County Rodeo comes to town each summer, complete with a fair and parade. And there are bargains to be had at the nearby outlet mall. The local economy is improving too. A manufacturer for wind turbine parts recently moved to Castle Rock, and officials have earmarked an economic development assistance fund of $5 million to bring new businesses to town. --A.W.

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Top 100 rank: 18
Population: 10,200
The volunteer spirit is alive and well in this former coal-mining town 13 miles from Seattle. Despite serious budget cuts that threatened the city’s summer 2011 events, local businesses and citizens offered time and cash to keep the community’s concerts and fireworks afloat. There’s a 350-acre golf course here, not to mention 12 parks; the 3,115-acre Cougar Mountain Wildland Park is right next door. Newcastle residents can jump on a trail in the city and end up in the “Issaquah Alps.” Tech employers such as Microsoft are almost as easily accessible. --A.W.

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Top 100 rank: 17
Population: 21,800
This affluent town is in Morris County, home to many big employers. More than 50 Fortune 500 companies have headquarters, major facilities, or offices in the region, including AT&T, Pfizer, Honeywell, and Bayer Healthcare Pharmaceuticals. True, Montville lacks a proper downtown. But its location--it’s an hour away from New York City, the beaches of the Jersey shore, and the Mountain Creek Ski Resort--help to make up for that. --N.D.17.

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Top 100 rank: 16

Population: 22,000
Thought it’s easily accessible to Boston by commuter rail, Acton feels very much like its own place. It’s a picture-perfect New England town, complete with Revolutionary War landmarks, historic homes, and lots of open space. One of Acton’s biggest draws is its progressive regional school district, which consistently ranks among the best in the state. Major area employers include IBM’s largest software campus and a branch of Cisco Systems, located in the nearby towns of Littleton and Boxborough, respectively. --N.D.

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Top 100 rank: 15

Population: 46,700
If you're looking for the Pacific Northwest ideal--snow-capped mountains and scenic lakes--Sammamish might be for you. Puget Sound and ski resorts are both an hour from this affluent Seattle suburb. High-tech employers in the area include Boeing, Amazon, and Microsoft, which is headquartered just 15 minutes away. Incorporated just over a decade ago, Sammamish still doesn’t have a real center where the community can gather. But local officials are working on a new downtown with retail, recreation, and town services. --A.W.

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Top 100 rank: 14

Population: 9,600
More people work than live in this town 10 miles from the Twin Cities. The families that do call Arden Hills home are attracted by a top-rated school district and a trail system that connects parks, playgrounds, and lakes. The town is known for its strict tree preservation laws, which means that even the newest subdivisions have so many mature trees that they seem like long-established neighborhoods. On the negative side, there’s a Superfund site in the area--but the EPA estimates that the cleanup process is almost complete. --A.W.

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Top 100 rank: 13
Population: 15,500
Agriculture is booming, and so is this small town in farm country: It has doubled in population over the past decade. Seed company Pioneer Hi-Bred and Iowa Public Television are both headquartered here, and the Camp Dodge military base provides stability. Architecture buffs take note: there’s a private residence designed by Frank Lloyd Wright in town. Des Moines is a commutable 14 miles away. And 10 miles north of here is Saylorville Lake, a popular summertime spot for boating and fishing. --N.D.

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Top 100 rank: 12
Population: 18,300
This friendly town near the Great Salt Lake lies 20 minutes from Salt Lake City’s job and cultural opportunities. More Small Town USA than suburb, Farmington is safe and quiet. That’s not to say it’s no fun: in the center of town is Lagoon, a 125-year-old amusement park that attracts visitors from all over Utah. The town has a mix of expensive turn-of-the-century houses and more affordable homes; a typical three-bedroom ran around $180,000 in mid-2011. What’s more, Farmington’s taxes are low, yet the town is in excellent financial shape --Angela Wu

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Top 100 rank: 11
Population: 17,500
Halfway between Boston and Providence, R.I., Sharon was settled way back in 1673; a church in town has a bell made by Paul Revere. It has long been a popular summer destination thanks to Lake Massapoag, which draws swimmers and boaters. For a small town, Sharon is diverse, with many institutions serving the Jewish, Christian, and Muslim communities. While there aren’t many jobs in town, residents who wish to commute to Boston have easy access via commuter rail. --Noelia de la Cruz

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Top 100 rank: 10
Population: 23,000
Unemployment: 5.5%
Despite some 2011 budgetary brouhahas in the state of Minnesota, Chanhassen has plenty going for it--including good jobs right within its borders (manufacturing and technology company Emerson is based here), evening diversion (the Chanhassen Dinner Theater is the nation’s oldest and largest), and nature galore (34 parks, 11 lakes, and the enormous Minnesota Landscape Arboretum). The town’s new state-of-the-art high school has racked up some national awards in just its second year. --I.M.

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Top 100 rank: 9
Population: 20,300
Unemployment: 8.2%
As West Coast towns go, Mukilteo (pronounced MUCK-ill-TEE-oh) is in good economic shape. Bank-owned homes represent a small fraction of houses on the market, and area employers, including Boeing, are hiring again. It has affordable homes by Seattle standards, good schools, and a killer location right on Puget Sound. And the town is spending to beef up its attractions: A new 29,000-square-foot community center debuted in February, and historic Lighthouse Park recently got a makeover. --S.M.

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Top 100 rank: 8
Population: 17,400
Unemployment: 5.1%
Middleton is right next to state capitol Madison and boasts 17,000 jobs right in town (employers include pharmaceutical company PPD and Electronic Theater Controls, the world’s biggest theater lighting company). Its walkable downtown has plenty of good restaurants, shops, and quirky attractions (National Mustard Museum, anyone?). Even its developments are cool: a Frank Lloyd Wright-inspired mixed-use project thoughtfully blends homes and businesses. And Middleton offers residents lots of parks and trails--including a new free splash park. --I.M.

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Top 100 rank: 7
Population: 29,100
Unemployment: 7.6%
Known to tourists as the town where Jesse James’ gang staged its first daytime bank robbery--and where Mormon prophet Joseph Smith languished in jail before fleeing west--Liberty today is a charming place with a quick commute to Kansas City’s mix of jobs in telecom, engineering, and life sciences. The school district is consistently ranked as one of Missouri’s best; student musicians play in a new state-of-the-art facility, and budding broadcast journalists have their own public-access channel. William Jewell College, with its lovely hilltop campus overlooking Liberty, lets residents take advantage of many cultural offerings. --Vanessa Richardson

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Top 100 rank: 6
Population: 8,600
Unemployment: 4.4%
Dartmouth College, located in this hamlet near the White Mountains, gives Hanover an economic, social, and cultural advantage rare in towns so far from major urban centers. Unemployment in town is about half the statewide average (Dartmouth and its top-rated medical center provide over 12,000 jobs). Graduate programs spin out entrepreneurial start-ups in almost every industry. Housing--which ranges from century-old Victorians to new construction--isn’t cheap, however. And students account for some fraternity-style rowdiness. --P.N.

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Top 100 rank: 5
Population: 18,900
Unemployment: 4.2%
Nebraska, sexy? You’d better believe it. With agriculture booming, towns here are showing employment and housing-market strength that’s the envy of the coasts. Papillion is no exception; its economy benefits from a broad base of industries, including health care and transportation, in nearby Omaha. In June, energy company Black Hills Corp. moved its local headquarters--and 130 jobs--here. There are also excellent schools, a five-month-old AAA baseball stadium, a new retail and restaurant complex, and loads of green space. --Sarah Max

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Top 100 rank: 4
Population: 42,600
Unemployment: 4.1%
Leesburg, which snuggles up to the Virginia-Maryland border, offers proximity to plenty of good jobs not just in government but also in defense contracting, consulting, and technology. True, commutes can be abysmal. But residents say that the tradeoff to live in this pretty town, which has seen more history than a Ken Burns film, is worth it. Many antebellum red-brick buildings still stand, now filled with restaurants and art galleries. On the negative side, there are some run-down neighborhoods.--Pieter van Noordennen

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Top 100 rank: 3
Population: 23,300
Unemployment: 8.2%
Solon is a small town with a large tax base: Major employers include Nestle, L’Oreal, and industrial equipment maker Swagelok. Solon punches above its weight in other areas too. Health care? The world-renowned Clevelend Clinic has a family health center here. Culture? Solon has its own philharmonic orchestra. Schools? Solon was the highest-achieving district in Ohio last year. And the student body is diverse: 11% of residents are black, 10% Asian. --Anne C. Lee

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Top 100 rank: 2
Population: 27,000
Unemployment: 6.6%
Milton is just minutes from the jobs and culture of Boston but feels in places like a country getaway. Tree-lined streets are dotted with historic homes. Single-family home prices have remained essentially unchanged since the market’s peak in 2005. One major reason for this stability is the outstanding school system, which boasts six brand-new buildings and offers such rich opportunities as a French immersion program that begins in elementary school. The downside: high taxes. --Ismat Sarah Mangla

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Top 100 rank: 1
Population: 18,400
Unemployment: 6.3%
This sunny, lively mountain town is safe (crime rates are among the lowest in Colorado) and easy to navigate. Lots of good jobs in tech, telecom, aerospace, clean energy, and health care can be found right in Louisville, and more are on their way. And there’s world-class mountain biking, hiking, and skiing in the nearby Rockies. Real estate prices have barely budged since 2005, yet a typical three-bedroom house here still runs less than a comparable one in nearby Boulder. Its schools consistently rank among the top three academically in the Denver area. —Jessica Levine

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