(Andrew Harrer/Bloomberg)

Mortgage rates continued their New Year swoon, according to the latest data released Thursday by Freddie Mac.

With financial markets uneasy about the global economy, investors are putting their money in bonds, which is driving yields down to very low levels. Because mortgage rates are closely tied to yields on long-term government bonds, rates are down as well.

296Armschart0124

The 30-year fixed-rate average sank to 3.63 percent with an average 0.7 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) The 30-year fixed rate has fallen three weeks in a row and is at its lowest level since May 2013. It was 3.66 percent a week ago and 4.39 percent a year ago.

Since Nov. 6 when the 30-year fixed rate average was above 4 percent, it has dropped 39 basis points. For someone buying a $500,000 home in the District, the difference between buying that home today with a 30-year fixed-rate mortgage as opposed to a year ago is about $175 per month.

The 15-year fixed-rate average dropped to 2.93 percent with an average 0.6 point, the second week in a row it has stayed below 3 percent. It was 2.98 percent a week ago and 3.44 percent a year ago.

Hybrid adjustable rate mortgages were mixed. The five-year ARM average fell to 2.83 percent with an average 0.4 point. It was 2.9 percent a week ago and 3.15 percent a year ago.

The one-year ARM average held steady at 2.37 percent with an average 0.4 point.

“Mortgage rates continued to fall, albeit at a slower pace,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement.

“Housing starts picked up in December coming in at a seasonally adjusted 1.089 million unit pace and beating market expectations. Meanwhile, the drop in energy prices pushed the Producer Price Index down 0.3 percent for December and the Consumer Price Index fell 0.4 percent.”

As rates continued to fall, mortgage applications surged last week, according to the latest data from the Mortgage Bankers Association.

The market composite index, a measure of total loan application volume, increased 14.2 percent. The refinance index grew 22 percent, while the purchase index fell 3 percent. Government refinances fueled the refinance increase, led by a 57 percent spike in FHA loan applications.

The refinance share of mortgage activity accounted for 74 percent of all applications, its highest level since May 2013.

“Mortgage application volume increased last week to its highest level since June 2013, led by a 22 percent increase in refinance application volume,” Mike Fratantoni, MBA’s chief economist, said in a statement.

“This increase was largely due to mortgage rates dropping to their lowest level since May 2013.  However, the recent reduction in FHA mortgage insurance premiums also played a role.”