WASHINGTON: Interest rates on the most popular U.S. home loan tumbled by the most in four months last week after the failure of Silicon Valley Bank and emergency measures taken to shore up the wider banking system drove a mad dash by investors to the safety of government bonds, the Mortgage Bankers Association said on Wednesday.

The resulting drop in yields on the Treasury notes that act as benchmarks for home loans pushed the average rate on 30-year fixed-rate mortgages down by 0.23 percentage point to 6.48% for the week ended March 17 from 6.71% the week before. It was the largest weekly drop since a decline of the same magnitude in mid-November, Reuters reported.

The lower rates drove a jump in loan application volumes, with applications for both new purchases and refinancing of existing loans hitting a six-week high, MBA said.