I realize everyone is glued to the stock ticker today, watching their personal net worth fall yet again; I know this because every time I wired up to do a live shot on CNBC today, my “hit” was “killed” at the last minute because the Dow dropped again.

But it is precisely on days like this that we have to focus on how it all affects housing; stocks may fill our 401K’s, but our homes are (or were) our single greatest investment.

The drop in the stock market was preceded by a huge drop in mortgage interest rates, and it will likely be followed by one as well. The overnight average last night on the 30-year fixed hit 4.35 percent on Bankrate.com. Economic uncertainty pushes Treasury yields down, which in turn pushes mortgage rates down. Tomorrow we get the jobs report, and my guess is that it won’t be particularly stellar either.

So I was all set to talk on TV today about how mortgage rates, even this low, won’t help the housing recovery significantly (sure, higher rates would hurt) because a) we’ve been at historically low rates for quite some time now, and b) rates are not the most important decision-making factor for consumers today. We had a great conversation about this yesterday on the blog, so I took it further to ask some mortgage professionals.

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The one positive in all the uncertainty surrounding the nation’s debt was a plunge in Treasury yields, which in turn sent mortgage rates to record lows.

The 30 year fixed hit a near-low of 4.45 percent last week from 4.57 percent, and the 15 year made a new low of 3.52 percent, according to the Mortgage Bankers Association. Those low rates pushed refinance applications up 7.8 percent and purchase applications up 5.2 percent (both seasonally adjusted).

So are we housing geeks now jumping for joy? All good? Maybe not so much.

“Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year’s level. Factors such as negative equity and a weak job market continue to constrain borrowers,” notes the MBA’s VP of research and economics, Michael Fratantoni. “Purchase activity increased off of a low base, returning to levels of one month ago, but remains weak by historical standards.”

So even ridiculously low rates are not exactly boosting the housing recovery; that’s because rates have been historically low for a while.

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