The 30-year fixed-rate dropped to 4.76 percent while the 15-year fixed-rate hit its lowest rate at 3.97 percent since December 2010, according to the latest Freddie Mac Primary Mortgage Market Survey.

Last week, the 30-year fixed-rate mortgage (FRM) averaged 4.88 percent. Last year at this time, the 30-year FRM averaged 4.96 percent.

Meanwhile, the 15-year FRM averaged 4.15 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

"With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds , which lowered its yields and other interest rates as well,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “This allowed fixed mortgage rates to drift lower this week.”

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.57 percent this week, with an average 0.6 point, down from last week when it averaged 3.73 percent. A year ago, the 5-year ARM averaged 4.09 percent.

The 1-year Treasury-indexed ARM averaged 3.17 percent this week with an average 0.6 point, down from last week when it averaged 3.21 percent. At this time last year, the 1-year ARM averaged 4.12 percent.

Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.

Nothaft added families have been strengthening their balance sheets. In the fourth quarter of 2010, household net worth rose by $2.1 trillion, boosted by gains in the stock market.

“This helped lower their financial obligation ratio (debt payments relative to disposable income) to the lowest level since the first quarter of 1995,” he said.