Giving the hard-hit housing market a flicker of optimism, mortgage rates in the US fell to yet another record low this week!

According to Freddie Mac, the mortgage giant, the interest rates on 30-year fixed-rate mortgages fell below 5% this week, and averaged 4.96 percent for the week that ended January 15 - this 11th weekly decline in a row marks the lowest level since 1971.

Interest rates started registering a drop after the Treasury Department and the Federal Reserve announcement on November 25 that the government would be buying almost $500 billion of mortgage-backed securities financed by Freddie Mac, Fannie Mae, and Ginnie Mae.

Keith Gumbinger, vice-president HSH Associates, a research firm, in Pompton Plains, N. J., said that for those who can qualify, it makes sense to refinance now. Estimating the rates to be the lowest since 1961, Gumbinger said: "We're near 50-year-low interest rates. How much lower do you think they can get?"

Coming as a ray of hope in the midst of mounting unemployment and a dwindling economy, the low rates have prompted an increase in home refinancing loans - with consumers short on cash feeling relieved due to refinancing to lower payments per month.

Commenting at the dropped rates, Lawrence J. White, an Economics professor at New York University's Stern School of Business, said that it is an important development since more affordable home financing could help bring buyers back to the market and prevent some of the foreclosures."