Mortgage rates dropped for the fourth week in a row, with the average conforming 30-year fixed mortgage rate now 5.57 percent. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.33 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing fell to 5.11 percent, and the average jumbo 30-year fixed rate eased to 6.85 percent. Adjustable mortgage rates plummeted, with the average one-year ARM plunging to 5.41 percent, and the average 5/1 ARM sinking to 5.35 percent.

Adjustable mortgage rates plunged following an emergency interest rate cut by the Federal Reserve. The repeated rate cuts by the Fed will benefit the many homeowners with adjustable mortgage resets still to come in 2008. The result will be payment increases that are much more manageable, enabling homeowners to remain current on their loans and avoid a payment-shock induced foreclosure. The economic worries that compelled the Fed to act have also pushed fixed mortgage rates to the lowest level since March 2004. Refinancing and locking in a permanently affordable monthly payment is an attractive option for many of those same homeowners.

Fixed rate mortgages are currently the most attractive option for borrowers. Six months ago -- on July 25 -- the average 30-year fixed mortgage rate was 6.75 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,297.20. Now that the average conforming 30-year fixed rate is 5.57 percent, the same $200,000 loan carries a monthly payment of $1,144.38.