Mortgage Rates Continue Freefall - 30-Year Average at 4.76%

Average 30-year mortgage rates dropped to 4.76% according to BestCashCow/Informa data. That's down from the high of 5.20% in early April. Homebuyers and homeowners looking to refinance can thank the European debt crisis for the drop below 5%. European debt fears have sent a wave of cash into Treasuries, driving down the 10 year note. The 10 year note is the benchmark used to set 30 year rates and it is now bumping around at its low for the year.

Other mortgage rates have also come down. The 15-year fixed rate mortgage dropped to 4.22%, down from a 4.52% in early April. Five-year ARMs are at 3.72% versus 4.05% in early April.

What Does This Mean for Homebuyers?

I've been following actual rates, not just averages for a 30-year fixed rate loan in Massachusetts with 0 points ($200,000 loan) for the past four months. In April the rate shot up to 5.125%. Six weeks ago it was 4.875%. Five weeks ago it's 4.625%. Today, it remains at 4.625%. What has changed are the number of banks offering a 4.625% rate. Several weeks ago just one bank did with $1,995 in fees. Now several banks are offering this ratge and CapWest Mortgage is only charging $397 in fees.

View mortgage rates by state and zip code.