With the news of a third round of quantitative easing from the Federal Reserve, the average rate for 30-year fixed-mortgages hit a record low in the week ending September 27, according to Freddie Mac.
The government-sponsored enterprise's Primary Mortgage Market Survey showed 30-year FRMs averaged 3.4 percent, down from 3.49 percent in the previous week. A year ago, 30-year FRMs averaged 4.01 percent.
Meanwhile, the average for 15-year FRMs dropped from 2.77 percent to 2.73 percent. Last year at this time, they averaged 3.28 percent.
"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 at Freddie Mac.
Keith Gumbinger, vice president of HSH.com, told CNNMoney that this is exactly what the Fed wanted to see. He predicted that rates could continue to fall another 0.1 percentage point in the coming weeks.
Record-low mortgage rates make it a great time for qualifying borrowers to buy a home or refinance their current loan.