Mortgage rates came off historic lows this week, but remained appetizingly low as sales of previously owned homes picked up steam last month.

The benchmark 30-year fixed-rate mortgage inched up this week to 4.16 percent from 4.1 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.39 discount and origination points. A year ago, the mortgage rate index was 5.09 percent; four weeks ago, it was 4.25 percent. The previous week’s rate of 4.1 percent was the record low in the 26-year history of Bankrate’s weekly rate survey.

The benchmark 15-year fixed-rate mortgage increased to 3.38 percent from 3.35 percent.The benchmark 5/1 adjustable-rate mortgage rose to 3.12 percent from 3.03 percent.

The latest weekly survey comes as the sputtering housing market shows signs of life. Sales of existing homes grew at the fastest rate in nearly two years last month, according to a report released Wednesday by the National Association of Realtors.

Home sales increased 4.3 percent over December to a seasonally adjusted annual pace of 4.57 million. That’s still well below the traditionally healthy pace of 6 million units, but the gain, the third in four months, bodes well for the upcoming spring buying season.

(Caveat alert: Buried in NAR’s report is the steep revision of December’s home sales figure from a 5 percent month-over-month increase to a 0.5 percent drop.)

“For good borrowers, these are the best of times,” says Mark Zandi, chief economist of Moody’s Analytics. “Rates are low; prices are low. Single-family housing is about as affordable as it has been.”

And for current homeowners, they have the enviable choice between two fixed-rate loans that offer rates unmatched in decades. While headlines focus on the widely popular 30-year fixed loan rate, its 15-year cousin is getting attention from homeowners who want to pad their wallets over the long term.

The share of borrowers refinancing into a 15-year fixed mortgage from a 30-year loan is at its highest point in eight years, according to a report released last week from Freddie Mac. And why not, with rates flirting with 3 percent?

“We have one (refi) closing next week. They got 2.875 percent on a 15-year,” says Pava Leyrer, president of Heritage National Mortgage in Grandville, Mich. “Oh my God, that’s a good rate. You can’t ride the bus for that kind of money.”

Homeowners who cut the length of their mortgage from 30 years to 15 can save tens of thousands of dollars in interest over the life of the loan, depending on the difference in interest rates and the remaining term, says John Stearns, a mortgage broker with American Fidelity Mortgage Services in Milwaukee.

Of course, a shorter term often means a bigger monthly payment, so borrowers with steady and secure incomes are the best candidates for a 15-year mortgage.

“I’ve had people who worked on commission come back to refinance out of a 15-year back into a 30-year because their income slowed down,” Leyrer says.

No need to act now

Fear not if you don’t feel ready to refinance or buy, or if you don’t qualify. Mortgage rates likely won’t move too much over the next year, says Paul Edelstein, director of financial economics at IHS Global Insight.

“Housing is really the laggard in the economic recovery,” he says, “so the (Federal Reserve) will continue to prop up the mortgage market to induce people to buy houses.”

The central bank’s policymaking committee promised last month to maintain its benchmark interest rate near zero until late 2014, making borrowing cheap for consumers (and for businesses). The Fed also continues to buy longer-term Treasuries and mortgage-backed securities to help keep a lid on mortgage rates.

Ancillary factors such as Europe’s ongoing debt saga may flick rates up or down several basis points as investors hedge risk by buying safer investments such as Treasuries. (The 30-year mortgage rate often tracks the yield on the 10-year Treasury bond.)

But the situation overseas would need to unravel for mortgage rates to dive further, Zandi says. The more likely scenario is slow growth in the economy and a crawl upward in rates.

“They will drift higher. They will be a little higher a year from now and definitely much higher two years from now,” he says.

NEW YORK (CNNMoney) — Even as the $26 billion mortgage settlement helps hundreds of thousands of troubled homeowners, it will bring a wave of new foreclosures.

Many lenders held off on reposessing homes during the complex negotiations between 49 state attorneys general, and federal officials.

That’s left a backlog of troubled loans, many of which won’t be helped by measures in the deal that will let homeowners refinance or reduce the amount of their mortgage.

“The bottom line is that 2012 will see a lot of foreclosures that should have taken place in 2011 and didn’t,” said Rick Sharga, executive vice president for Carrington Holdings, a real estate finance firm.

Daren Blomquist, vice president of RealtyTrac, online marketer of foreclosed properties, agrees that much of last year’s 34% drop in foreclosure filings was likely due to the uncertainty involved in the negotiations. He estimates that new filings will climb from 1.9 million in 2011 to between 2.2 million and 2.5 million this year.

“We think what we saw in 2011 was artificially low foreclosure numbers,” he said. He added that banks took longer to file foreclosure notices last year, and longer to finish the foreclosure process.

Banks pay homeowners to sell

HUD press secretary Derrick Plummer said Thursday’s mortgage settlement is designed to make foreclosure the last resort for banks negotiating with homeowners who are seriously delinquent on loans.

Sharga and Blomquist agree said that the mortgage deal will help many homeowners stay in their homes who would have otherwise been forced out. Up to one million mortgage holders could see the amount of money they owe reduced.

But the solutions offered by the settlement can only work for homeowners who can afford to make new, lower mortgage payments. Banks will have little choice to foreclose on those who have stopped paying due to prolonged unemployment or other severe economic distress.

“The settlement really wasn’t designed to prevent foreclosure on loans that aren’t salvageable,” said Sharga.

Banks have been letting delinquent loans sit in limbo, but now that a settlement has been reached, banks will likely start contacting delinquent homeowners to see which loans can be salvaged. Sharga says that the banks will likely turn up a raft of new foreclosures.

The five lenders who are parties to the deal — Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial — together account for about 60% of the mortgage market, Sharga said. And there are many other lenders who were also taking a wait-and-see approach while the big banks held talks, who might soon join the settlement as well.

Sharga and Blomquist said that while the increase in foreclosures will cause plenty of pain in the short term, it’s an important part of the recovery process for the housing market, especially the hardest-hit markets.

“The uncertainty has been very bad for the market over the last year,” said Blomquist.

There are currently more than 3 million homeowners either seriously delinquent on mortgages or in foreclosure, and that looming inventory has been one of the biggest drags on home sales prices.

“The market needs to clear out a lot of the distressed inventory before prices start to come back,” Sharga said.

Home prices continued to drop in November, according to the latest report that covers 20 cities across the country in its index. Out of those 20, 19 saw a decline, resulting in a 1.3% dip from the previous month in the index score.

CNNMoney cites the latest numbers from the S&P/Case-Shiller 20-city report, which shows that not only did prices on homes fall in a month, but they’re down 3.7% from a year ago. The peak prices were 32.8% higher in the summer of 2006, and we’re only hovering 0.6% above March 2011′s lowest prices.

“Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall,” said David Blitzer, spokesman for S&P.

The only city to post a gain in the index was Phoenix, where prices rose 0.6% in the month, but were still down 3.6% from the same time a year ago.

Many factors could contribute to the drop, which is surprising to some experts who had been seeing an encouraging amount of activity in the housing market.

Some sellers who were holding out are finally accepting the fact that prices likely aren’t going to go up anytime soon, contributing to the lower prices. It’s gotta go sometime, is the thinking here, and after three years of a recession, people are lowering prices just to get that house sold.

The increase in sales of properties in foreclosure could also be dragging the numbers down, as those homes are going for a song from banks who repossessed them from mortgage borrowers who couldn’t pay up.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 19.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer Confidence retreated in January, after large back-to-back gains in the final two months of 2011. Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month.”

Consumers’ appraisal of current conditions was less favorable in January. Those claiming business conditions are “good” decreased to 13.3 percent from 16.3 percent, while those stating business conditions are “bad” increased to 38.7 percent from 33.5 percent. Consumers’ assessment of the labor market was also less positive. Those saying jobs are “plentiful” decreased to 6.1 percent from 6.6 percent, while those claiming jobs are “hard to get” increased to 43.5 percent from 41.6 percent.