Although the cheap mortgage rates have aided in the rising of the home sales this year, potential homeowners are still finding it difficult to qualify for home loans and the housing market still has a long way to go to recover.

Mortgage rates tend to follow long term treasury notes. Due to the weaker U.S. economy and the uncertainty with the debt crisis in Europe, investors have been placing their investments in "safer" Treasury securities. As the demand for Treasurys continues to increase the yield will fall causing the lower mortgage rates.