WASHINGTON (AP) — Never have average rates on long-term fixed mortgages been as low as they are now: 3.91 percent for a 30-year home loan and 3.21 for a 15-year loan.

The new lows mark the eighth straight week in which the average on the 30-year loan has hovered near 4 percent.

Those rates make now a tantalizing time to refinance. And, with home prices having sunk in most areas of the country, many would-be buyers are tempted, too.

Yet the pace of refinancing and home buying has been mostly unchanged over the past year. That's mainly because so many Americans lack the home equity, credit scores or cash to refinance or buy. Many who do qualify to buy or refinance have already done so.

Here's a look at whether and why it makes sense to refinance or buy.

— Why now is a prime opportunity.

Rates are at record lows. More than 75 percent of homeowners with conventional government-backed mortgages are paying rates above 5 percent. Millions of homeowners, especially those with solid jobs, stable finances and strong credit, have refinanced during 2011. The average rate on the 30-year fixed loan has remained below 4.5 percent since July. (In 2008, it topped 6.5 percent.)

—Why more people aren't refinancing.

In many cases, people whose home values have dropped aren't eligible. Shrunken home values have reduced the total equity Americans have in their homes to under 40 percent — the lowest since the Great Depression. As a result, many people lack enough equity to qualify for refinancing. Or their credit scores aren't high enough.

Another obstacle: Refinancers typically must pay thousands in closing costs and appraisal fees. Those costs usually add up to 1 percent of the loan's value — $2,000 in fees on a $200,000 loan, for example. Typically, most experts say, it's worthwhile for homeowners to refinance if they can reduce their rate by a full percentage point.

— Why more people aren't buying homes.

Too many would-be buyers can't afford the required down payment, are out of work, lack enough income or are burdened by large debt loads. Home prices have sunk 31 percent since the housing boom four years ago, leaving many Americans fearful that prices have yet to bottom. They don't want to throw good money at a depreciating asset.

Half of would-be buyers also say they don't think they'll ever save enough for the 20 percent down payment now expected by most sellers, according to a survey by the National Foundation for Credit Counseling.

For those looking to buy, banks are also insisting on higher credit scores. Roughly 60 percent of U.S. households don't have the required scores above 700 to get a prime mortgage, according to an Associated Press analysis of Fair Isaac Corp., or FICO, and other credit-score data. The average U.S. credit score is 661.

— The consequences of refinancing

When people refinance at lower rates, they pay less interest on their loans. So they end up with more money to spend, save or invest. For those who can qualify, the savings can be significant. If, for example, a homeowner with a $200,000 mortgage at 6 percent can refinance down to 4.5 percent, the savings would be $3,000 a year.

Still, the benefits for the larger economy are limited. Most homeowners who refinance these days tend to sock away their savings or pay down debt rather than spend it.