Mortgage rates on 30 year fixed loan dropped for a ninth consecutive week and reaching the lowest levels in 37 years.

Interest rates on the 30 year fixed mortgage dropped to an average of 5.10 percent according to s survey released by Freddie Mac, down from previous 5.14 percent.

Mortgage rates dropped significantly since Federal Reserve introduced a plan to buy up to $500 billion of mortgage securities. The program will also buy up to $100 billion of debt.

Mortgage rates will continue to head even lower in next few weeks.

However, housing market is not showing any recovery at this time, as home buyers are not in rush to buy homes. Refinance on the other hand, had increased dramatically as home owners are taking advantage of low rates.

Even with a reduction in a 30 year fixed mortgage savings can equal to fee hundreds per months and few thousands per year.

Other interest rates such as 15 year fixed mortgage averaged 4.83 percent, down from 4.91 percent.

One year adjustable mortgage or ARM, fell to an average of 4.85 percent from 4.95 percent.

5/1 ARM, which has a rate set for 5 years averaged 5.57 percent.

A year ago 30 year fixed mortgage rates were hovering around 6.07 percent, 15 year fixed at 5.68 percent and one year ARM at 5.47 percent.

Critical point in US recovery is housing market and credit market. Housing market may see another 20 percent drop in 2009.

Good new is that 2009 will be a buyers market as real estate home prices are expected to drop.  This year might be the best year in buying a real estate.

Credit market still remains frozen for some businesses and consumers. Only those with a good credit standing and good credit score might be able to take advantage of low rates and qualify for loans. With government steps of trying to unfreeze credit market many banks are still very hesitant to lend again to customers with bad credits.

The fastest drops in home values come from Virginia Beach as those who bought property a year ago lost app 5 percent of home values and app. 34 percent owe more on their property than it's worth.

Cities such as Orlando and Miami 30 percent of home owners are under water with similar number in El Centro, California; Bakersfield, California and Cumberland, Md.

Even with lower mortgage rates real estate market has not been improving a new government programs are coming to help not only housing market but also overall economy.

Signals from President-elect Barack Obama that he and his team will be ready to provide all necessary power to help struggling economy has boosted confidence in so called "Obama rally" in stocks.

Obama signaled that another round of economic package will be his priority when he takes over the presidency on January 20. The package aims to generate 3 million new jobs.