Mortgage company Freddie Mac reports that the 30-year fixed-rate mortgage (FRM) average 4.57 percent, down from last week when it averaged 4.58 percent. That’s the lowest level since Freddie Mac began tracking rates in 1971. Last year at this time, the 30-year FRM averaged 5.20 percent.

The 15-year FRM this week averaged 4.07 percent, up from last week when it averaged 4.04 percent. That was the lowest on records dating to September 1991. A year ago at this time, the 15-year FRM averaged 4.69 percent.

Average rates on one-year adjustable-rate mortgages fell to 3.75 percent from 3.80 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for all types of loans in Freddie Mac’s survey averaged 0.7 a point.

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Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasurys has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasury. Yet the falling rates have yet to spark a homebuying boom – or energize the economy. New-home sales collapsed in May after homebuying tax credits expired. The economy also remains under pressure from high unemployment. And many people don’t qualify under tightened lending rules.

Low rates throughout the economy also hurt one group of Americans: savers. Puny rates are especially hard on people living on fixed incomes who are earning next to nothing on their savings. Lending activity remains sluggish. Mortgage application volume dipped 6 percent last week from a week earlier, according to the Mortgage Bankers Association. Refinancing activity fell 7 percent. And mortgage applications to buy homes slipped 1.2 percent.

Many Americans owe more on their mortgages than their homes are worth – often called “under water” – and can’t refinance. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home’s value and have loans owned or guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March. Yet that’s a small fraction of the nearly 15 million homeowners who are under water, according to Moody’s Economy.com, and cannot refinance. In hard-hit areas in Nevada and Florida, for example, home prices have fallen 50 percent or more from their highs. Record-low rates can’t rescue those homeowners.Given the costs of refinancing, some mortgage experts say a refinancing can be worthwhile if you can shave at least 0.75 percentage point from an existing rate. Others suggest waiting until you can lower your rate by at least a point.

Despite some lenders’ ads, refinancing is never free. A fee normally goes to the mortgage broker or lender. There are also fees for title insurance, a new appraisal, document processing and other charges. Often, mortgage brokers or lenders create the appearance of a “no fee” mortgage by adding the costs to a total loan amount or by charging a higher interest rate.

People considering refinancing should factor in such fees. They should also calculate how many months it would take to recover them. For those who expect to stay in their home for two years or less, the fees might outweigh the savings from a lower rate.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate, even within a given day. Rates on 15-year fixed-rate mortgages fell to an average of 4.13 percent. That was the lowest on records dating to September 1991. It was down from 4.2 percent a week earlier. Rates on five-year adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac’s records, which date back to January 2005 for such loans.

Average rates on one-year adjustable-rate mortgages fell to 3.77 percent from 3.82 percent. That was the lowest average since May 2004.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year, 5-year and 1-year loans. The average fee for 15-year loans was 0.6 of a point.

High unemployment and slow job growth are weighing on the housing market as well. Fed Chairman Ben Bernanke has expressed confidence that the nation won’t fall back into a “double dip” recession. At the same time, the recovery remains vulnerable, and one of the chief threats is the real estate market. New-home sales for May came in at a seasonally adjusted annual sales pace of 300,000, the Commerce Department said Wednesday. That was the slowest in the 47 years records have been kept. And it was the largest monthly drop on record. Sales have now sunk 78 percent from their peak five years ago.

The broader economy is feeling the impact. The drop in new-home sales means fewer jobs in the construction industry, which normally powers economic recoveries. This time, construction has remained lackluster. Each new home built creates roughly three jobs for a year and generates an average of $90,000 in taxes, homebuilders say. The effect extends to other industries, from lumber yards to makers of kitchen faucets.

Buyers who signed sales contracts by the April 30 deadline have until June 30 to close on their purchases and qualify for the tax credit. Because the new-home sales report measures contracts to buy homes, it offers a glimpse of what the housing industry will endure throughout the summer.
Unlike new homes, sales of previously occupied homes are recorded not when a contract is signed but when a sale closes. That can sometimes take two months.

That’s why there were expectations this week for strong sales of previously occupied homes through June. But the 2.2 percent drop in May from the previous month showed the entire industry is weakening.

New-home sales fell nationwide from April’s levels. They dropped 53 percent from a month earlier in the West and 33 percent in the Northeast. Sales dropped 25 percent in the South, 24 percent in the Midwest.

Builders sharply scaled back construction after the housing market bust. The number of new homes up for sale in March fell to the lowest level in nearly 40 years. But the sluggish sales pace in May means it would still take eight and a half months to exhaust that supply. A healthy level is about six months.

The median sales price in May was $200,900. That was down 9.6 percent from a year earlier and down 1 percent from April.

New-home sales made up about 7 percent of the housing market last year. That’s down from about 15 percent before the bust. Demand for new homes has slumped, partly because builders have been forced to compete with foreclosed properties that sell at steep discounts.

One bright spot emerged Wednesday from a survey of corporate executives. It found the number of CEOs planning to ramp up hiring has reached its highest point since mid-2007.

The Business Roundtable, an association of CEOs of big U.S. companies, said its survey shows 39 percent of chief executives expect to boost their payrolls in the second half of 2010. Only 17 percent say jobs will drop. About 43 percent expect no change in the size of their work force