Consumers who thought they missed the market bottom in mortgage rates are now getting another chance. Rates fell again in the week ended Sept. 2 with the national average interest rate on a 30-year loan hitting its lowest level since April 1.

Mortgage powerhouse Freddie Mac (FRE:NYSE) in its weekly survey Thursday said the benchmark 30-year, fixed rate mortgage was at 5.77%, down from 5.82% last week. The 15-year mortgage averaged 5.15%, down from 5.21%. The one-year, Treasury-indexed adjustable-rate mortgage fell below 4% to 3.97%.

"Overall rates are dropping because there is a big question about the economy," says Beth Ann Bovino, economist for Standard & Poor's. "The nervousness over the past few days has to do with tomorrow's payroll number."

Bovino's estimate for Friday's August nonfarm payroll number is for an increase of 200,000 jobs, higher than the consensus level of 150,000, but says the effects of Hurricane Charley might cut into high-end predictions.

Retail brokers say the recent drift down in rates has stirred some action in the marketplace, but it is far off the frenetic pace of the past few years, particularly when it comes to refinancing.

Bert Morrison, a retail mortgage broker for Quality Funding in Rancho Bernardo, Calif., says the last few days have been "steady but not spectacular."

On the opposite coast, Keith Gumbinger from Pompton Plains, N.J.-based HSH Associates says the drift down in rates has put a few people back into the marketplace but "unfortunately it is arriving at the quietest time of the year."

Doug Duncan, chief economist at the Mortgage Bankers Association, says he expects new purchases to remain strong through the rest of 2004 as mortgage rates still will be at historical lows no matter what occurs with tomorrow's payroll announcement. He does not expect 30-year mortgage rates to pass 6.5% until early next year.

As for the refinancing market, however, Duncan says "there is no question that its best days are behind us." In 2003, refinancings reached the $2.5 trillion level, according to the Mortgage Bankers Association. Duncan's estimate for 2004 is only $1.1 trillion

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