Dropping Like A Stone

Mortgage rates fell again this week, sending the rate on the 30-year fixed-rate mortgage down for a fifth straight week to its lowest level since February, Freddie Mac reported on Thursday.

The mortgage rate averaged 5.78% for the week ending Sept. 18, down from 5.93% last week and 6.34% a year ago, according to Freddie Mac's weekly survey. It hasn't been lower since the week ending Feb. 14 2008. The loan hit its low for the year on Jan. 24, at 5.48%.

The 15-year fixed-rate mortgage averaged 5.35%, down from 5.54% last week and 5.98% a year ago. The mortgage hasn't been lower since the week ending March 27, when it averaged 5.34%. To obtain the rates, the fixed-rate mortgages required payment of an average 0.6 point.

As a result, mortgage applications surged nearly 58% since Aug. 15, largely led by a 122% again in applications for refinancing, The total volume of mortgage applications filed, including both refinance and purchase loans, jumped 33.4% last week compared with the week before, according to the Mortgage Banker Association.

The government takeover of mortgage giants Fannie Mae and Freddie Mac, part of an ongoing series of trouble in the financial sector of the U.S. economy, has spurred a decline in mortgage rates that some analysts say could be long-lasting.

Meanwhile, the housing market remains mired in a deep slump. Single-family building permits reached a 26-year low, data showed this week. Courtesy Marketwatch.