Fifteen-year mortgages dropped to a historic low last week while the 30-year rate came close to hitting bottom on the heels of the nation's top bank pumping cash into a troubled real estate market.

"The Federal Reserve purchased more than $1 trillion worth of mortgage-backed securities from Fannie Mae and Freddie Mac and that's driving down mortgage rates," said Karl Case, an economist at Wellesley College. "The Fed wants to save this housing market at all costs."

Earlier this year, as the nation's recession worsened, the Fed pledged up to $300 billion to buy long-term government bonds and $750 billion in mortgage-backed securities to spur home sales and lower mortgage interest rates.

Last week the 15-year rate averaged 4.32 percent, down from 4.40 percent for the week ending Nov. 5 - the lowest level since Freddie began tracking rates in 1991.

The 30-year fixed rate loan was 4.83 percent, down from last week when it averaged 4.91 percent.

The 30-year fixed rate loan hit its lowest level since 1971 in April when it fell to 4.78 percent.

- tgrillo@bostonherald.com

Originally published by By THOMAS GRILLO.

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