Mortgage rates continued to race downward, with the 30-year fixed hitting its lowest level since March 2004.

The average 30-year fixed-rate plunged 38 basis points, to 5.42 percent. A basis point is one-hundredth of a percentage point. Rates on the 30-year fixed are now within striking distance of the all-time low in the Bankrate survey -- 5.28 percent -- from June 11, 2003.

The average 15-year fixed -- a popular option for refinancing -- fell 21 basis points, to 5.3 percent. The average jumbo 30-year fixed plummeted 39 basis points, to 6.98 percent.

Adjustable-rate mortgages also sank. The one-year adjustable-rate mortgage fell 18 basis points, to 5.91 percent. The popular 5/1 ARM dropped 33 basis points, to 5.84 percent.

Mortgage activity rose a seasonally adjusted 2.9 percent for the week ending Dec. 12, according to the Mortgage Bankers Association.

Refinancing activity was up 6.5 percent from the previous week, while applications for new purchase declined by 4.5 percent, according to the Mortgage Bankers Association.

In other housing-related news:

• The real estate Web site Zillow.com reported that U.S. homeowners will have lost $2 trillion in home value by the end of 2008.
• Housing permits and starts dipped to record low levels in November, according to the Commerce Department.
• Foreclosure filings fell 7 percent from October to November, according to the online foreclosure-property marketer RealtyTrac. However, many experts warned the dip was an aberration resulting from efforts to temporarily halt foreclosures on the part of some major lenders, Fannie Mae and Freddie Mac, and several state governments.

-- Chris Kissell

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