However, even more attention appears to have been caught by the 15 year fixed rate mortgage, which this week has carried a national average of just 2.97% as opposed to the previous week's 3.04% – the first time a rate below 3% has been recorded in the history of the tracker.

While the housing market remains rather sluggish at best, these rates are being taken full advantage of by millions of current homeowner who either by luck or by management have retained their home equity throughout the market crash.

According to the Mortgage Bankers Association however, home purchase mortgage applications remains disappointingly low and represent less than 25% of all current applications.

That being said, the enormous spike in refinance activity has come as welcome news to the industry, spurring the MBA to increase annual mortgage volume estimates to $1.28 trillion – a $200 billion improvement.

Eoin Treacy's view Record low mortgage rates are a blessing for those with the ability to refinance long dated debt. This process helps to free up cash flow for purchases of other goods and services which should help to boost the consumer driven economy. From the perspective of a mortgage bond investor the greatest threats to one's portfolio arise from defaults and prepayments because they can shorten the maturity of one's investment while refinancing affects the rate paid by the debtor. Mortgage REITs utilising leverage have an additional interest rate risk. (Also see Comment of the Day on May 29th)

American Capital Agency Corp yields 15.45% and continues to extend the breakout from its 30-month range. A break in the progression of higher reaction lows, currently near $31 would be required to begin to question medium-term scope for additional upside.

While Mortgage REITs tend to invest in very different instruments there is a high degree of commonality evident, suggesting increased investor demand for high yielding instruments. Hatteras Financial Corp (13.04%) has held a progression of higher reaction lows since October and hit a new 12-month high last week. A sustained move below $28 would be required to question medium-term scope for continued higher to lateral ranging. MFA Mortgage Investments (13.05%) Starwood Property Trust (8.39%), Two Harbors Investment Corp (15.09%) Invesco Mortgage (13.96%), Cypress Sharpridge Investments (15.19%), Capstead Mortgage Corp (12.81%) and Anworth Mortgage Asset Corp (13.16%) share similar patterns.