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Mortgage rate falls to record 3.75 percent

Average U.S. rates on 30-year and 15-year fixed mortgages dropped to record lows again this week, with the 15-year loan dipping below 3 percent for the first time ever. Low rates have helped brighten the outlook for home sales this year.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.75 percent. That's down from 3.78 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular refinancing option, slipped to 2.97 percent. That's down from 3.04 percent last week.

"Market concerns over tensions in the Eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan."

Rates on the 30-year loan have been below 4 percent since early December. The low rates are a key reason the housing industry is showing modest signs of a recovery this year. 

The Associated Press contributed to this report.