Due to the FED program that pumped $1.25 billion into mortgage backed securities, mortgage rates have remained at or around 5% until the programs expiration in March, prompting many economists to believe that the rates would once again rise. However, once the program expired, the European Debt crisis caused many investors to shift their money into safer US Treasury bonds and as long-term treasury bonds are so closely tied in with mortgage rates, the rates have continued to remain at historic lows.

Mortgage rates have not been the driving force in the real estate market; it's been the Homebuyer Tax Credit that has fueled the market this year. The tax credit provided an opportunity for qualified first time homebuyers to receive up to $8,000, while qualified second time homebuyers were able to receive up to $6,500. Homebuyers participating in the program must have a signed sales credit by the end of April and must close by the end of June. Fortunately a bill is in the works to extend the tax credit in an effort to provide extra time for homebuyers that were unable to close by June. As the tax credit expired at the end of April, home sales have once dropped to historic lows.

According to Greg McBride, BankRate.com Senior Financial Analyst, "As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better."

Freddie Mac collects rates weekly, Monday through Wednesday, and as the rates are so closely tied in with long-term treasury bonds they are subject to change significantly even on a given day.