NEW YORK (CNN/Money) -
Long-term mortgage rates fell again this week as a report showed the sharpest drop in housing starts in nearly 11 years.
The rate on 30-year fixed-rate mortgages averaged 5.68 percent in the week ended Thursday, with an average 0.6 point payable up front, down from an average 5.71 percent last week, mortgage firm Freddie Mac said.
A year earlier, the rate on the 30-year fixed-rate loan stood at 5.88 percent.
The 15-year mortgage rate fell to 5.11 percent, with 0.6 of a point up front, from last week's 5.14 percent. The rate averaged 5.24 percent a year ago.
One-year adjustable rate mortgages (ARMs) averaged 4.18 percent, up from 4.15 the previous week, with 0.7 of a point payable up front. At this time last year, the one-year ARM rate averaged 3.77 percent.
"The Commerce Department report on housing starts showed a considerable drop in starts in November," said Frank Nothaft, Freddie Mac vice president and chief economist. "However, with December's mortgage rates continuing to dip even further, we expect housing starts will bounce back fairly quickly."
The Commerce Department said Thursday starts on new homes and apartments slumped 13.2 percent to a seasonally adjusted annual rate of 1.77 million last month from a revised 2.04 million pace in October.
The drop was bigger than economists had expected and the sharpest since January 1994.
While new home sales are a relatively small part of the overall housing market, economists watch sales and home construction for any signs of weakness.
Freddie Mac's (up $0.84 to $70.60, Research) average mortgage rates are based on a survey of 125 lenders nationwide.