Mortgage rates drop to new record lows

Mortgage interest rates fell to all-time lows for the second straight week, a sign the Federal Reserve's actions are having an effect. 

The rate on a 30-year-fixed loan dropped to 3.36 percent from last week's 3.40, while 15-year rates fell to 2.69 percent, down from last week's record low of 2.73, Freddie Mac reported on Thursday. 

The central bank announced last month its plans to buy $40 billion a month in mortgage-backed securities until the labor market significantly improves. 

"Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy," said Frank Nothaft, vice president and chief economist of Freddie Mac.

A Wednesday report from the Mortgage Bankers Association showed a big jump — 16.6 percent — in applications last week, driven by a 20 percent increase in refinancing. 

The housing market has been showing signs of life with economists generally agreeing that the market is on the upturn, albeit slowly. 

Still, problems persist that include tight credit standards and higher downpayment requirements, which are keeping some potential home buyers out the market. 

At a housing summit earlier this week, industry experts and economists think a more robust economic recovery is needed to help the housing market and, in turn, get private lenders back into the mortgage finance to loosen up credit for a broader range of people.