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15-year mortgage rate falls to 3.9%; 30-year figure hits average of 4.76%

Fixed rates for mortgages tumbled this week, and the 15-year loan dipped below 4 percent for the first time in three months. Rates followed the yield on U.S. Treasury bonds, which fell on worries that the crisis in Japan could slow economic growth.

Freddie Mac said Tuesday that the average rate on the 15-year fixed-rate mortgage, a popular refinance option, dropped to 3.97 percent, from 4.15 percent. The last time the rate was below 4 percent was in mid-December. It reached 3.57 percent in November, the lowest level on records dating from 1991.

The average rate on the 30-year fixed-rate mortgage fell to 4.76 percent, from 4.88 percent the previous week. It hit a 40-year low of 4.17 percent in November.

Mortgage rates tend to track the yield on the 10-year Treasury note. Those yields have tumbled as investors have sought safer investments.

Low mortgage rates haven't been enough to jump-start the housing market. Home construction last month plunged to its lowest level in almost two years, while building permits, an indicator of future housing activity, sank to a five-decade low, the government said.

Homebuilders remain pessimistic about the outlook for housing. High unemployment, a record number of foreclosures and tough credit standards have kept many people from buying homes. And many economists don't expect home values to bottom out until midyear, another factor dissuading potential homebuyers.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country from Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage fell to 3.57 percent, from 3.73 percent. The five-year rate hit 3.25 percent last month, the lowest on records dating from January 2005.

The average rate on one-year adjustable-rate home loans slipped to 3.17 percent, from 3.21 percent, the year's low in a year for the one-year ARM rate.

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