The average 30-year, fixed-rate fell 8 basis points, to 5.29 percent. A basis point is one-hundredth of a percentage point. The rate is 1 basis point above the all-time Bankrate low of 5.28 percent on both June 11, 2003, and Jan. 14 of this year.
It's important to note that Bankrate's survey occurred before the Federal Reserve's March 18 announcement that it plans to buy $300 billion of long-term Treasury bonds and $750 billion in mortgage-backed securities. The announcement immediately sent mortgage rates plummeting.
This week's average 15-year fixed—a popular option for refinancing—fell 2 basis points, to 4.86 percent.
The average jumbo 30-year fixed dropped 11 basis points, to 6.88 percent.
Adjustable-rate mortgages also fell this week. The one-year, adjustable-rate mortgage slid 10 basis points, to 5.48 percent. The popular 5/1 ARM also dipped 10 basis points, to 5.24 percent.
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Mortgage loan application activity increased sharply for the second straight week, according to the Mortgage Bankers Association. For the week ending March 13, applications climbed a seasonally adjusted 21 percent compared to a week earlier.
Refinancing activity grew by 30 percent, while applications for new purchases were up 1.5 percent.
Construction of new homes jumped unexpectedly in February, according to the U.S. Commerce Department. Housing starts rose to a seasonally adjusted 583,000, up 22 percent from January. Construction had fallen for eight straight months before February.
Meanwhile, homebuilder sentiment remained glum for March, according to the National Association of Home Builders/Wells Fargo Market Index.
The index reading for March remained unchanged at 9. An index reading below 50 indicates the number of builders who view sales conditions as poor exceeds the number of builders who believe sales conditions are positive.
March was the fifth straight month of single-digit index readings.