Mortgage rates are at historic lows; 30-year fixed-rate average matches all-time low at 3.49 percent A week after the Federal Reserve undertook its largest stimulus plan in two years, mortgage rates responded by setting or matching record lows. According to the latest data released by Freddie Mac, the 30-year fixed-rate average plunged to 3.49 percent, which equalled its all-time low set on July 26 - only the second time in history it has been below 3.5 percent. It was down from 3.55 percent a week ago and 4.09 percent a year ago at this time. The 15-year fixed-rate average fell to a historic low of 2.77 percent, down from 2.85 percent last week and 3.29 percent a year ago. It has remained below 3 percent since the end of May. Hybrid adjustable-rate mortgages held steady. The five-year ARM rose slightly to 2.76 percent, up from 2.72 percent a week ago, but down from 3.02 percent a year ago. The one-year ARM was unchanged for the third week in a row at 2.61 percent. It was 2.82 percent a year ago. Frank Nothaft, Freddie Mac vice president and chief economist, pointed to the Fed's action as the reason for the drop in the rates. "Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows, which should aid in the ongoing housing recovery," Nothaft said in a statement. New construction on one-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010. Meanwhile, mortgage applications edged slightly down from the previous week, according to the Mortgage Bankers Association. The Market Composite Index, a measure of mortgage loan application volume, fell 0.2 percent from a week ago. The Refinance Index increased 1 percent from the prior week, while the Purchase Index fell 4 percent from last week. The refinance share of mortgage activity increased to 81 percent of total applications. How low can mortgage rates go? Video: Impact of Fed's monetary policy on market Video: Yale professor calls QE3 a "charade" Existing-home sales, housing starts rise