Mortgage rates sink to record lows The Federal Reserve's stimulus plan, combined with indications of a weakening economy, have propelled mortgage rates to historic lows, according to the latest data released by Freddie Mac. The 30-year fixed-rate average sank to a record-low 3.36 percent, down from 3.4 percent a week ago. It was 3.4 percent a year ago at this time. The 15-year fixed-rate average fell below the five-year adjustable-rate average, dropping to 2.69 percent. The last time the 15-year fixed rate was below the five-year ARM was Oct. 15, 2009. The 15-year fixed rate was 2.73 percent a week ago and 3.26 percent a year ago at this time. Hybrid adjustable-rate mortgages were mixed. The five-year ARM rose slightly to 2.72 percent, up from 2.71 percent a week ago, but down from 2.96 percent a year ago at this time. The one-year ARM slid to 2.57 percent, down from 2.60 percent last week and 2.95 percent a year ago. "Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy," Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July's increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase. Meanwhile, mortgage applications soared as rates declined, according to the Mortgage Bankers Association. The Market Composite Index, a measure of mortgage loan application volume, rose 16.6 percent from a week ago. The Refinance Index increased 20 percent from the prior week, while the Purchase Index went up 4 percent from last week. It was the highest Refinance Index since April 2009. The refinance share of mortgage activity continues at a robust pace and now accounts for 83 percent of total applications. "Refinance application volume jumped to the highest level in more than three years last week as each of the five mortgage rates in MBA's survey dropped to new record lows in the survey," said Michael Fratantoni, MBA's vice president of research and economics, in a statement. Financial markets continue to adjust to QE3, as the ongoing presence of the Federal Reserve as a significant buyer of mortgage-backed securities applies downward pressure on rates. Although there was a slight decline in the HARP share of refinance activity, the level of HARP volume remains steady.