Mortgage rates were lower across the board, with the average conforming 30-year fixed mortgage rate falling to 6.53 percent. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.4 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing declined to 6.09 percent, while the average jumbo 30-year fixed rate stepped back to 7.69 percent. Adjustable mortgage rates followed suit, with the average 5-year ARM sinking 6.09 percent and the average 10/1 ARM dropping to 6.56 percent.

Resurgent worries about the economy punished stocks, to the benefit of bonds. Mortgage rates are closely related to yields on long-term government bonds. As investors fled a volatile stock market, much of the money ended up in fixed income investments such as Treasury securities and mortgage bonds. This brought mortgage rates down, though not enough to match the decline in Treasury yields over the past two weeks. The wider spread between mortgage bonds and risk-free Treasury yields represents the ongoing concerns about credit quality and strains in many corners of the debt markets.

Mortgage rates have been on a wild ride since the beginning of the year. The average 30-year fixed mortgage rate was as low as 5.57 percent in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. But at today's rate of 6.53 percent, a $200,000 loan would mean a monthly payment of $1,268.08.