Mortgage rates fell sharply from one week ago, with the average 30-year fixed mortgage rate dropping from 5.70 percent to 5.34 percent. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage has an average of 0.37 discount and origination points.

The average 15-year fixed rate mortgage sank to 5.03 percent and the average jumbo 30-year fixed rate dipped to 6.98 percent. Adjustable rate mortgages were lower also, with the average 1-year ARM pulling back to 5.67 percent and the 5/1 ARM retreating to 5.37 percent.

Mortgage rates plunged after Treasury Secretary Tim Geithner pledged to reduce mortgage rates through an as-yet-to-be-determined housing initiative in the Financial Stability Plan. Increasing skepticism about the economic and financial outlook helped drive benchmark Treasury yields lower, pulling mortgage rates lower as well. These worries outweighed the predominant investor concern of last week, the volume of government debt issuance.

Mortgage rates have dropped as much as the outside temperatures compared to six months ago. Back in August, the average 30-year fixed mortgage rate was 6.74 percent, meaning a $200,000 loan would have carried a monthly payment of $1,295.87. With the average rate now 5.34 percent, the monthly payment for the same size loan would be $1,115.58, a savings of $180 per month for a homeowner refinancing now.