U.S. mortgage rates moved still lower in the past week, nearing a record low set in early December, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.

Interest rates on 30-year fixed-rate mortgages, the most widely used loan, averaged 4.78 percent for the week ended May 27, down from last week's 4.84 percent, the survey showed.

Lower rates should buoy home loan refinancing activity, putting more cash into consumers' hands to funnel into the U.S. economy as it recovers from the worst recession in 70 years.

Lower rates also make homes more affordable during the spring selling season -- the industry's most important period.

This week's 30-year rate is below the year-ago level of 4.91 percent and also the lowest since the week ended December 3, 2009 when it hit a record low of 4.71 percent.

Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities. Freddie Mac started the survey in 1971.

These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit, Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

Recent robust data on pending, new and existing home sales show a sector that has benefited from the federal government's home buyer tax credit that just expired.

To take advantage of the $8,000 first-time buyer credit or a $6,500 credit for existing owners buying a new residence, people had to sign purchase contracts by April 30 and must close by June 30.

While demand for home purchase loans has slumped since the tax credits expired, demand for home refinancing loans has jumped, said Michael Moskowitz, president of Equity Now, a direct lender based in New York and licensed in eight states.

The drop in mortgage rates could not have come at a better time for the housing market, he said. Better affordability, in my opinion, should have a stronger impact on housing demand than the tax credits.

LOW RATES, MIXED DEMAND

The Mortgage Bankers Association said on Wednesday that applications to refinance home loans jumped to a seven-month high last week as rates neared record lows but purchase demand was stuck at a 13-year low.

Freddie Mac said the 15-year fixed-rate mortgage averaged 4.21 percent, down from 4.24 percent last week and the lowest since Freddie Mac started tracking the mortgage type in August 1991.

One-year adjustable-rate mortgages (ARMs) were 3.95 percent, down from 4.00 percent last week and the lowest since the week ended May 27, 2004.

But the rate on the 5/1 ARM, set at a fixed rate for five years and adjustable each following year, was 3.97 percent, slightly higher than the 3.91 percent last week.

A year ago, 15-year mortgages averaged 4.53 percent, the one-year ARM was 4.69 percent and the 5/1 ARM was 4.82 percent.

(Editing by John O'Callaghan)

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