Rates on 30-year mortgages dropped to a new low this week, the eighth time they've hit new lows this year.
The average interest rate on a 30-year fixed-rate mortgage was 5.93 percent this week, down from 6.03 percent last week, Freddie Mac said Thursday in its weekly nationwide survey of mortgage rates.
This week's rate was the lowest since Freddie began tracking 30-year mortgage rates in 1971. The rate surpassed the previous record low rate reported by Freddie Mac of 5.94 percent, set in the middle of November.
The 30-year rate has hit a new low eight times this year. Records that reach back earlier than Freddie Mac's put this week's 30-year mortgage rate at the lowest since 1965, Freddie Mac spokeswoman Eileen Fitzpatrick said.
Rates on 15-year fixed-rate mortgages, often used for refinancing, fell to 5.32 percent, compared with 5.42 percent last week.
For one-year adjustable-rate mortgages, rates dropped to 4.01 percent this week, the lowest level since Freddie Mac began tracking these rates in 1984. Last week's rate was 4.07 percent.
A year ago, 30-year mortgages averaged 7.16 percent, 15-year mortgages were at 6.65 percent and one-year ARMs stood at 5.25 percent.
Low mortgage rates this year have fueled a flurry of home mortgage refinancing activity. The extra monthly cash consumers save by refinancing their mortgages at lower interest rates has helped to support consumer spending, which has been the main force keeping the economy going this year.
The Mortgage Bankers Association of America said that refinancing activity accounted for 72.5 percent of total mortgage loan applications filed last week. That was down from 73 percent the previous week.
Low mortgage rates also have been keeping the housing market healthy this year, even as other parts of the economy are struggling because of the uneven economic recovery. Home sales are on track to post a record this year.
Frank Nothaft, Freddie Mac's chief economist, called 2002 an "amazing year" for housing.
"The annual average for the 30-year fixed-rate mortgage rate this year was about 6.5 percent, the lowest annual average in more than 31 years," he said. "That was the primary factor that led to an incredible amount of home building, home sales and refinancing, all of which helped keep the economy from another recession."
This week's mortgage rates do not include add-on fees known as points. Each loan type carried an average fee of 0.6 point this week.