According to the Mortgage Bankers Association, last week’s mortgage interest rates continued to drop, spurring a 16.4 percent rise from the week before in applications.

Refinance activity on mortgages increased from 65.3 percent in the week ending on September 25th to 66.3 percent in the week ending on October 2nd.

The average interest rate for a 30-year, fixed-rate mortgage was down 4.89 percent as of October 2nd, which was down from 4.94 percent the week before. This is the lowest level since May when it was 4.81 percent. Points increased from 0.94 to 1.13.

What does it all mean? With cheaper interest rates on mortgages, the loan will cost less in the long run. This will help to stimulate the housing market as payments become more affordable. It’s just a matter of time before the readjustment process for the economy passes and things become stable before returning to growth.

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