By Kevin Chiu
Troubled by high long term unemployment worries, financial markets set the stage for another drop in mortgage rates this week, sending 
rates to a new historic record low. The average 30-year fixed rate home mortgage dropped to 3.89%, down from 3.91% last week, according to Freddie Mac.
Mortgage interest rates are at their lowest level in U.S. history, but banks and mortgage companies are still requiring borrowers to provide near excellent credit in order to obtain the best rates. Most consumers, including those obtaining refinances are getting loans at higher mortgage interest rates.
The drop in rates also followed a series of lower Treasury bond sales as U.S. Treasuries saw their 10-year benchmark securities fall to near 1.90%.
The fixed 15-year mortgage saw a bigger drop than the conventional 30-year mortgage, hitting an average of 3.16% with 0.8 point down from 3.23% a week ago. The shorter term mortgages are gaining popularity with homeowners as a result of lower rates and a lack of confidence in banks after millions of Americans lost their homes to foreclosure.
The 5-year Treasury indexed adjustable rate mortgage averaged 2.82%, down from 2.86% a week earlier. The 1-year ARM averaged 2.76%, also declining from 2.80% last week.
Lenders are attempting to attract additional business with the lower rates, especially consumers interested in investing in real estate. “Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” said Freddie Mac chief economist Frank Nothaft. “Although the economy added 1.6 million jobs in 2011, which was the most since 2006 the unemployment rate remained historically elevated.
“The 2009 to 2011 period had the highest three-year average unemployment rate since 1939 to 1941. Moreover, the Federal Reserve indicated in its January 11th regional economic review that most industries saw limited permanent hiring at the end of last year.”