Mortgage rates have been near record lows all year. That has helped fuel a modest housing recovery.
Sales of newly built and previously occupied homes are up from a year ago. Builders are more confident in the market and are responding by starting construction on more homes.
Home prices have also increased. A report issued Tuesday by Core Logic showed that a measure of U.S. home prices rose 6.3 percent in October compared with a year earlier. That was the largest yearly gain since July 2006.
Rising prices encourage more people to sell their homes. And they lead to more buying, in part because some start to worry prices could eventually rise further.
Lower mortgage rates also have persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. Consumer spending drives nearly 70 percent of economic activity.
Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money to meet larger down payment requirements.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday 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 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans was unchanged at 0.6 point.
The average rate on a one-year adjustable-rate mortgage slipped to 2.55 percent from 2.56 percent. The fee for one-year adjustable-rate loans declined to 0.4 point from 0.5.
The average rate on a five-year adjustable-rate mortgage fell to 2.69 percent from 2.72 percent last week. The fee was steady at 0.6 point.