Mortgage rates fall to record lows

Average mortgage rates dropped again this week, hitting record lows, bolstering the gradually recovering housing market. 

Rates have dropped in the two weeks since the Federal Reserve announced another round of quantitative easing with plans to buy $40 billion in mortgage-backed securities until the job market improves substantially. 

Rates on 30-year loans fell to a record-low 3.40 percent, ticking down from last week's 3.49 percent, while 15-year loans also eclipsed the previous week's all-time low, dropping to 2.73 percent, down from 2.77, Freddie Mac reported Thursday. 

"Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve's purchases of mortgage securities, and should support an already improving housing market," said Frank Nothaft, vice president and chief economist for Freddie Mac.

After years of struggles, the housing market is mounting a consistent recovery, prices were up in all 20 cities in the S&P/Case-Shiller index released earlier this week and home sales are picking up, even though they remain below healthy levels.

Plus, builder confidence has been gradually rising all year. 

Still, industry experts warn that while low mortgage rates can help the housing market, there are other hurdles faced by potential homeowners including the lack of credit availability for first-time homebuyers and inconsistent appraisals that are nixing some sales. 

The housing market's recovery is expected to accelerate next year and pick up steam in 2014, experts predict.