NEW YORK (CNNMoney) -- As Congress and President Obama hammered out a debt deal over the past week, mortgage rates plunged -- hitting new lows in some instances.
The 30-year fixed rate, usually the most popular choice for homebuyers, fell to 4.45% from 4.57% last week -- its lowest point since last November, according to the Mortgage Bankers Association.
Meanwhile, the rate on the less popular 15-year fixed plunged to a new record low of 3.52%, down from 3.67% a week earlier.
The up-front points lenders charged dropped as well, to 0.78 from 1.14 for 20%-down loans, according to the industry group. A homebuyer financing a $200,000 mortgage could save $14 a month and pay $720 less at closing based on the current points.
The rock-bottom interest rates drove up total mortgage applications -- both for purchases and refinancings -- by about 7%, compared with a week earlier, said Michael Fratantoni, the Mortgage Bankers Association's vice president of research and economics. While the increase may seem substantial, he noted that applications are still well below last year's level.
"Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year's level. Factors such as negative equity and a weak job market continue to constrain borrowers," he said.
On Bankrate.com Wednesday, a 30-year fixed was available that carried an annual percentage rate of just 4.03%. The overnight average was 4.37%, the site reported.
Mortgage rates are following bond yields lower, explained Greg McBride, Bankrate's chief economist. The yield on 10-year Treasury notes hit 2.6% on Wednesday down from 3.03% the last week of July.
"The plunge in Treasury yields is because we've been hit with a string of poor economic readings," said McBride.
Those include a weak GDP report and slowdowns in manufacturing, consumer spending and hiring.
With rates so low and home prices down more than 30% from peak, there has probably never been a more affordable time to buy a home.
For some buyers though, "Time is of the essence.," said McBride. "The loan limits (for Fannie/Freddie mortgages) drop on October 1 so acting now for closing by Sept. 30 is important for buyers in the upper price levels." 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.88% | |
| 15 yr fixed | 3.20% | 3.23% | |
| 5/1 ARM | 3.84% | 3.88% | |
| 30 yr refi | 3.82% | 3.93% | |
| 15 yr refi | 3.20% | 3.23% |
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