The 15-year FRM this week averaged 4.95 percent with an average 0.4 point, down from last week when it averaged 5.21 percent. A year ago at this time, the 15-year FRM averaged 5.98 percent. The 15-year FRM has not been lower since the week ending April 1, when it averaged 4.84 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.13 percent this week, with an average 0.4 point, down from last week when it averaged 5.40 percent. A year ago, the 5-year ARM averaged 6.00 percent. The 5-year ARM has not been lower since June 30, 2005, when it averaged 5.06 percent.

One-year Treasury-indexed ARMs averaged 4.99 percent this week with an average 0.6 point, down from last week when it was 5.26 percent. At this time last year, the 1-year ARM averaged 5.49 percent. The 1-year ARM has not been lower since October 27, 2005, when it averaged 4.91 percent.

"Economic news released last week confirmed the weak condition of the housing market. Housing starts fell further in December to 1.006 million units, the slowest pace since May 1991," said Frank Nothaft, Freddie Mac vice president and chief economist. "For the year as a whole, housing starts dropped nearly 25 percent, from 2006's level. This was the largest annual decline since 1980. New permits issued also fell to the lowest level since March 1993.