Average US rate on 30-year mortgage falls to 3.81 percent

Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage declined to 3.81 percent from 3.92 percent a week earlier. That was its lowest level in three months. The rate has increased from its 3.63 percent average a year ago but remains well below its historic average of 6 percent.

The average rate on 15-year fixed-rate mortgages dipped to 3.10 percent from 3.19 percent.

On Wall Street Wednesday, stocks tumbled as the price of oil suffered its worst one-day drop since September. The Dow Jones industrial average dropped more than 500 points during the day. The market clawed back much of the decline but still ended sharply lower with a loss of 249.28 points, or 1.6 percent.

The continuing tumult in stock markets around the world has pushed up prices of U.S. government bonds as investors seek safety. That has depressed the yields on the bonds, which mortgage rates track.

The yield on the 10-year Treasury bond dropped to 1.98 percent Wednesday — its lowest level since October — from 2.09 percent a week earlier. The yield slipped further to 1.97 percent Thursday morning.

The benchmark yield has fallen sharply since the start of the year amid the stock market turbulence. At the end of 2015, it stood at 2.30 percent.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan remained at 0.5 point.

The average rate on five-year adjustable-rate mortgages dipped to 2.91 percent from 3.01 percent; the fee rose to 0.5 point from 0.4 point.