WASHINGTON -- Mortgages are cheaper today than they've been in a half-century. If only most people had the job security, the credit score and the cash to qualify.
The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.
Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.
Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in May after an enticing tax credit expired.
"As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better," said Greg McBride, senior financial analyst with Bankrate.com.
Local real estate agents said the mortgage business is much the same in the Lowcountry.
James Wedgeworth of Charter I Realty & Marketing on Hilton Head Island said he recently worked with a client who wanted to put $1 million down to purchase a $3 million house. The deal fell apart after lenders insisted on 50 percent down, Wedgeworth said.
"Mortgage rates are great if you can get them, but you've got to jump through hoops to get them," he said.
For a buyer of a standard single-family home, getting a mortgage is usually not a problem, he said.
Buyers of second homes might experience "a little bit of a problem," he said.
As a result, the vast majority of homes selling are below $417,000, the maximum mortgage backed by Fannie Mae and Freddie Mac.
Of the approximately 400 home sales that closed this year on Hilton Head Island and in Bluffton, about 360 were below that mark, Wedgeworth said after examining Multiple Listing Service records.
"The lower price range is selling because it's easier to get financing," he said.
Wallace Thomas of Century 21 Carolina Realty in Beaufort said the national trends largely hold true there, too.
After years of overly aggressive lending brought on the recession, lenders have grown cautious, forcing buyers and real estate agents to "pay the piper," he said.
The one upshot? Buyers who qualify for mortgages can afford more expensive homes and often have their pick of a number of options.
"The few strong buyers are getting a fantastic buy," he said.
Rates have fallen over the past two months as investors have become nervous about Europe's debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall. Mortgage rates track those yields.
While mortgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CDs are especially hard on people who are living on fixed incomes and earning next to nothing on their money.
Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent, according to the Mortgage Bankers Association.
Besides, many people who want to refinance -- and are able to -- have already done it, said Michael Fratantoni, vice president of research and economics at the trade group. And refinancing costs can total several thousand dollars.
"Rates haven't dropped low enough to justify a second refinancing," Fratantoni said. "The group of people who could potentially benefit is much smaller than it was 15 months ago."
Another factor: Many Americans owe more on their mortgages than their homes are worth and can't refinance through the usual channels. 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 their loans guaranteed Freddie Mac or Fannie Mae.
About 291,000 homeowners have participated as of March -- a small fraction of the estimated 15 million homeowners who are "underwater" on their mortgages. And in Nevada and Florida, where home prices have fallen 50 percent or more from their highs, neither record-low rates nor government help can rescue homeowners.
"It's not the desire to refinance. It's the ability to refinance," said Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando, Fla.
Refinancing is generally considered worthwhile for homeowners who can shave at least three-quarters of a percentage point off the rates they pay now and plan to stay in their homes for a long time.
Besides the fees for the mortgage broker or lender, there are fees for title insurance, a new appraisal, document processing and other charges. And in "no fee" mortgages, costs are often added to the loan amount or the interest rate is higher.
To figure the national average, Freddie Mac collects mortgage rates each Monday through Wednesday 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 since at least 1991 and 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 to January 2005 for those loans.
Island Packet report Josh McCann contributed to this report.