The 10-year Treasury benchmark dropped 5/32 to yield 4.93 percent this week bringing about a slight decrease in mortgage rates.
The subprime mortgage meltdown has begun to spread to prime loans as even credit-worthy borrowers have started to fall behind on payments.
In the past, mortgage deliquencies were tied to personal problems or basic economic reversals, such as job loss. Today, many delinquences can be traced to unaffordably high home prices.
Falling home prices have been the significant factor - off more than 2 percent from their highs, according to the Case Shiller home price index.