U.S. 30-year mortgage rates dropped to a new record low in the past week, according to a survey released on Thursday by Freddie Mac FMCC.OB, as concerns mounted about the economic recovery.

Attractive mortgage rates have raised demand for home refinancing loans in recent weeks. They have failed to increase appetite for mortgages to purchase a home, a trend that does not bode well for a housing market that still faces a huge imbalance between supply and demand.

Rates on 30-year fixed-rate mortgages, the most widely used loan, averaged 4.57 percent for the week ended July 8, down from the previous week's 4.58 percent and 5.20 percent a year earlier, according to the survey, which started in April 1971.

With mortgage rates falling to historic lows, refinance activity has been strong over the past three months, Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

While low rates and high affordability have helped the housing market gain ground, it has struggled in recent months given stubbornly high unemployment and mounting foreclosures.

Home loan refinancing, however, puts more cash into consumers' hands to funnel into the U.S. economy and could help many homeowners avoid foreclosure.

Freddie Mac is the second-largest U.S. mortgage finance company.

Freddie Mac said the 15-year fixed-rate mortgage averaged 4.07 percent, up from 4.04 percent last week.

Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

David Adamo, CEO of Luxury Mortgage in Stamford, Connecticut, said consumers are wary about making a home purchase despite low mortgage rates,

Even with historically low interest rates and the affordability factor for housing at all time highs there seems to still be an air of caution for many would be buyers, he said.

In addition, many homeowners have been discouraged from refinancing, particularly for jumbo loans, he said.

LOW RATES, MIXED DEMAND

The rate on the 5/1 ARM, set at a fixed rate for five years and adjustable each following year, was 3.75 percent, down from 3.79 percent last week, and the lowest since Freddie Mac started tracking the mortgage type in 2005.

One-year adjustable-rate mortgages (ARMs) were 3.75 percent, down from 3.80 percent last week.

The Mortgage Bankers Association said on Wednesday that applications for home refinancing loans surged last week.

A year ago, 15-year mortgages averaged 4.69 percent, the one-year ARM was 4.82 percent and the 5/1 ARM was 4.82 percent.

(Editing by Andrew Hay)

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