The average rate on the 30-year fixed mortgage dropped this week, following lower yields on Treasury bonds.
Freddie Mac said Thursday the average rate on the 30-year loan slipped to 4.87 percent from 4.95 percent. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed home loan fell to 4.15 percent from 4.22 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note. Investors are putting more money into Treasurys, concerned that Libya's uprising will keep oil prices above $100 a barrel and hurt consumer spending. That has lowered those yields.
Low mortgage rates haven't been enough to boost housing. Fewer homebuyers signed contracts to purchase homes in January, the second straight month of waning demand, the National Association of Realtors said Monday.
High unemployment and strict lending requirements have kept many people from buying homes. And a record number of foreclosures are forcing home prices down, making other potential buyers fearful that the market has yet to hit bottom. Most economists don't expect home values to bottom out until midyear.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on 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 3.72 percent from 3.80 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on one-year adjustable-rate home loans edged up to 3.23 percent from 3.40 percent.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac's survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.