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U.S. mortgage rates fell to a three-year low last week, helping to extend this year's boom in home borrowing.

Applications for new home loans increased by an adjusted 2% during the week ended Sept. 6, the Mortgage Bankers Association said Wednesday. The level of borrowing is up some 69% from the same time last year. 

"August overall was the strongest month of activity so far in 2019," Joel Kan, associate vice president of economic and industry forecasting for the Mortgage Bankers Association, said in a press release.

The average fixed contract rate on a 30-year conventional mortgage slid to 3.82%, the lowest in almost three years, from 3.87% the prior week. As recently as November, the average rate was above 5%. 

The drop in costs, driven by Federal Reserve interest-rate cuts and a drop in yields on 10-year U.S. Treasury bonds to historically low levels, has encouraged more borrowers off the sidelines, helping to revive what had been a sluggish housing market.

Last week, applications for loans to purchase new or existing homes rose by 5%, while applications for refinancing loans rose by 0.4%, the association said.