Mortgage rates on the fixed side appear to be headed below 3.5% on a 5 yr fixed. I have not seen this myself before, so, I am pretty sure this will be a record low. The weakness in the stock market is the primary reason so many people are investing in BONDS, increasing the money supple and as this money supply increases, it lowers the cost of money for banks who want to borrow. A rate drop was predicted last March, but I think no one predicted 3.5%~
Keep an eye on this trend if you are looking to buy or renew your mortgage!