Mortgage rates fall to their lowest levels of the year.

The average for a 30-year fixed loan is now 4.84 percent. That is down from 4.93-percent earlier this week.

"The timing is fortuitous," said Greg McBride, a senior financial analyst at Bankrate.com, "because home shoppers who rushed to sign their purchase contracts in late April to capture the tax credit are locking in their mortgage rates now."

New buyers were offered a credit worth up to $8,000, while current home owners who bought and moved into a new home could receive $6,500. In order to receive them, buyers had to have a signed offer by April 30 and must close by the end of June.

Economists expected home sales to decline once the credit expired, but the lower mortgage rates could help offset the falloff.

The debt crisis in Europe is behind the lower rate. The demand for safer investments is high, which in turn lowers mortgage rates.