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Mortgage Rates: Which Way Will They Go?

(Mortgage rates poll article updated with new housing market forecasts from Freddie Mac chief economist, Frank Nothaft.)

NEW YORK ( TheStreet) -- Last week, Freddie Mac (FMCC) reported the lowest mortgage rates ever recorded.

The 30-year-fixed mortgage rate, which it has been collecting since 1971, was at 4.56%, down from 4.57% the week before. A year ago at this time the rate was at 5.2%.

The 15-year-fixed mortgage rate averaged 4.03% last week, down from 4.06% the week before and 4.68% a year ago.

While it might appear, in light of this, that now would be a great time to buy a house, consumers are apparently lacking the confidence needed to make a big purchase. After federal tax credits for homebuyers expired April 30th the housing market weakened. The National Association of Realtors reported a 5.1% drop in existing home sales in June.

"If an $8,000 tax credit didn't get you to buy a house, then the incremental $60 a month savings from lower mortgage rates isn't going to do it either," said Greg McBride, senior financial analyst at Bankrate.com.

McBride explained that low mortgage rates cannot boost the housing market alone, and many potential buyers are struggling with job uncertainty -- and when buyers aren't sure of what their income prospects are going to be over the next few years, they aren't willing to take a risk.

Of course, as jobs are created and the economy ultimately recovers, home sales are expected to return to a sustainable healthy level.
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