The average rate on a 30-year, fixed-rate mortgage was 4.99 percent, down from 5.06 percent a week earlier, mortgage company Freddie Mac said Thursday.
It was the third straight weekly decline. The drop comes after interest rates fell in the bond market this week as concerns about the economy increased demand for the safety of government debt, which is closely tied to mortgage rates.
The average rate on 15-year, fixed-rate mortgages fell to 4.4 percent, down from 4.45 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.27 percent, down from 4.32 percent a week earlier. Rates on one-year, adjustable-rate mortgages dropped to 4.32 percent from 4.39 percent.
Borrowers can lower their interest rates by buying points, equal to 1 percent of the total loan amount. The nationwide averages in Freddie Mac's survey were 0.7 points for 30-year loans and 0.6 points for 15-year, five-year and one-year loans.
Falling mortgage rates might help bolster the nation's housing market as borrowing becomes less expensive for consumers. The decline in home-loan rates boosted the number of mortgage applications by more than 9 percent last week, according to data from the Mortgage Bankers Association.
The Mortgage Bankers Association's index of applications to purchase a home or refinance a mortgage rose 9.1 percent in the week ended Jan. 15, led by a surge in refinancing. The group's refinancing gauge gained 11 percent, while the purchase index advanced 4.4 percent.