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Refinancing run not yet seen, sources report.

Article Excerpt
Interest rates continue to drop, but evidently there hasn't been enough change in rates yet to send people in droves to the bank seeking to save some money by refinancing home mortgages.

"The 30-year and 15-year rates are down somewhat, but I think they haven't totally bottomed out," said Mississippi Banking Commissioner John Allison. "People could be holding off on refinancing because the Fed rates are expected to go lower. But just by the fact the Fed does a short-term rate cut doesn't automatically equate to a lower mortgage rate. Mortgage rates are triggered by a longer-term federal instrument. Ultimately, mortgage rates are predicated on a 10-year Treasury product. If the discount rate changes today, the ten-year rate doesn't necessarily change. It takes time to trickle down into the long-term rates. A discount rate reduction ultimately affects the long-term rates."

The rule of thumb in banking is that to make it cost effective to refinance a mortgage-depending on the bank fees that must paid to refinance-usually there needs to be a rate in the marketplace that is 1.5% to 2% lower than the current mortgage rate.

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