Fixed mortgage rates hit another record low

Fixed mortgage rates dropped for the second straight week to historic lows, but they aren't yet providing a needed boost to the depressed housing market. 

The average rate for a 30-year fixed loan dropped to 4.09 percent for the week ending Sept. 15, from 4.12 percent the previous week, the lowest rate since 1951, Freddie Mac said Thursday. 

The average rate on a 15-year mortgage, a popular refinancing option, dropped to 3.30 percent from 3.33 percent, probably the lowest rate ever, economists say.

Interest and mortgage rates are likely to stay low — they've been below 5 percent for most of the past year — but the recovery of the housing market is being hampered by 9.1 percent unemployment, low prices, increasing foreclosures, tight lending standards and higher downpayment requirements. In addition, 23 percent of homeowners have negative equity. 

In addition, many potential homeowners can't qualify for the lowest rates, as banks require better credit scores. 

Mortgage rates typically track the yield on the 10-year Treasury note, which has remained a refuge for investors in the roiling markets. 

Regardless of consistently low rates, sales of new and existing homes are looking dismal this year. New home sales could drop to a 50-year low, while previously owned homes are setting up for the worst performance in 14 years. 

Mortgage applications increased last week with purchases and refinancing increasing, the Mortgage Bankers Association reported Wednesday. But the upticks aren't buoying the housing market. 

Lawmakers are pressing the Obama administration help more eligible homeowners refinance into lower rates to slow the rate of foreclosures and provide some stability.