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Economics might record 2010 as the Year of the Low Mortgage Rate.

It wouldn’t be an understatement, given that 30-year fixed mortgage rates have been flirting with the bargain basement 4.5% level.

Yet even with rates that low, veteran real estate gurus say that rates still aren’t low enough to jump-start the mortgage lending market. Benjamin Clark, president of the National Association of Exclusive Buyer Agents, recently asked his 500-member staff what 30-year fixed mortgage rate level would rekindle the mortgage market.

The most popular answer for 42% of the staff was “no mortgage rate” at all, meaning respondents felt that no rate would pop the clutch on the home-buying market.

But 30% wanted that rate to drop to 3%, and another 10% felt the market needed the average 30-year rate to drop 2% to put the market back on track.

This high stakes of “how low can you go” will probably never materialize, particularly if some key members of the Federal Reserve have their way. While the refrain heard from the Fed’s Open Markets Committee is “steady as she goes,” or continue low rates, some officials have balked at that stance.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, has voted against keeping interest rates at current low levels the past five meetings held by the FOMC.

In a recent town hall meeting in Lincoln, Neb., Hoenig said the Fed’s low rate policy was threatening economic recovery. Lowering interest rates "during a crisis is understandable, but a zero rate after a year of recovery gives legitimacy to questions about the sustainability of the recovery and adds to uncertainty," he told the audience.

"We need to get off of the emergency rate of zero, move rates up slowly and deliberately," Hoenig said. "This will align more closely with the economy’s slow, deliberate recovery so that policy does not lag the recovery."

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That’s food for thought as we look at another week of low mortgage rates measured by the BankingMyWay Weekly Mortgage Rate Tracker.

Description                         This Week                 Last Week

One-Year ARM                        3.42%                        3.683%

Three-Year ARM                     4.172%                       3.78%

Five-Year ARM                        3.572%                       3.775%

15-Year Mortgage                  3.996%                       4.232%

30-Year Mortgage                  4.503%                       4.743%

With 30-year fixed rates right on the number (4.5%), you really have to wonder if mortgages can go any lower. If you’re unsure, it might not hurt to lock in now. For the lowest mortgage rates, visit BankingMyWay's Mortgage Rate Search. Week-to-week, it’s your best bet for finding the best mortgage rate deal possible.

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