Putting 4% interest rates into perspective! Is that a yawn I detect?

I just finished reading an article about how would be home buyers are unimpressed with 4% interest rates. It seems that the powers that be believed that stimulating interest rates to their lowest levels in history would create a housing and mortgage refinance boom.

A funny thing happened though, mortgage applications went down. Not only did they go down but they went down significantly. Below you will see a chart for the average interest rates since 1981. The average sales price for a home in Johnson County Kansas is $250,000

$250,000 loan at 16.6 % = $3483.11 for principal and interest (1981)

$250,000 loan at 6.41% = $1565.40 for principal and interest (2006, the peak of the market)

$250,000 loan at 4.85% = $1319.23 for principal and interest (2011 1st quarter)

$250,000 loan at 4.12% = $1210.90 for principal and interest (current rate as of 10/26/2011)

So what does that mean? a $250,000 loan would cost you $2,272.21 per month less than it would have in 1981. A $250,000 loan would cost you $354.50 less per month than the peak of the market in 2006 and finally a $250,000 loan would cost $108.33 per month less than just the beginning of this year.

Tell me what you think, Will interest rates go lower? Do you care? Are home prices still too high? Economy? Job market?