The average rate on a 30-year fixed mortgage fell to 4.55% last week, the MBA said. It was the lowest rate ever recorded in the survey, falling from 4.6% in the prior week.

>> Mortgage Applications Rise on Refi

Fears of a stalled recovery returned to the forefront after the Federal Reserve Bank of Kansas City said Thursday manufacturing activity in the region slowed significantly in August as the index fell to 0 from July's reading of 14.

The news offset earlier optimism after the Labor Department reported a better-than-expected decline in the number of people filing for jobless benefits

-- Written by Miriam Marcus Reimer in New York.

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