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Mortgage rates plunged to their lowest levels in months in response to the Federal Reserve’s announcement last week that it would leave its bond-buying program intact, according to the latest data released by Freddie Mac.

The 30-year fixed-rate average dropped by nearly 20 basis points to 4.32 percent with an average 0.7 point. It was down from 4.5 percent a week ago, but up from 3.4 percent a year ago. News that the Fed might consider winding down its stimulus had kept the 30-year fixed rate at or above 4.5 percent for more than a month.

(Pam Tobey/The Washington Post) (Pam Tobey/The Washington Post)

The 15-year fixed-rate average slid down to 3.37 percent with an average 0.7 point. It was 3.54 percent a week ago and 2.73 percent a year ago. The 15-year fixed rate has remained above 3 percent since early June.

Hybrid adjustable rate mortgages also declined. The five-year ARM fell to 3.07 percent with an average 0.5 point. It was 3.11 percent a week ago and 2.71 percent a year ago.

The one-year ARM edged down to 2.63 percent with an average 0.4 point. It was 2.65 percent a week ago.

“These low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “For instance, the S&P/Case-Shiller 20-city composite house price index rose 12.4 percent over the 12-months ending in July, which represented the largest annual increase since February 2006. In addition, more than half of the cities had annual growth exceeding 10 percent and four cities saw increases exceeding 20 percent.”

Low interest rates have spurred mortgage applications for the second week in a row, according to the latest data from the Mortgage Bankers Association.

The Market Composite Index, a measure of total loan application volume, grew 5.5 percent. The Refinance index climbed 5 percent, while the Purchase Index increased 5 percent.

The refinance share of mortgage activity remained at 61 percent, two weeks after sinking to 57 percent, its lowest level since April 2010. Refinances had accounted for more than 80 percent of applications earlier this year.