Mortgage rates drop to record low

WASHINGTON — Rates on 30-year mortgages plunged this week to the lowest level on record after the Federal Reserve launched a new effort to assist the staggering U.S. housing market.

Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85 percent this week, from 4.98 percent last week. It was the lowest in the history of Freddie Mac's survey, which dates back to 1971.

The previous record low of 4.96 percent was set in the week of Jan. 15.

The Fed last week said it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and other and loosen credit.