Mortgage Rates Hit 2014 Low

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Mortgage rates have dropped to their lowest level in over a year.

The average rate for a 30-year loan now stands at 4.1%, according to Freddie Mac. That was its lowest level since june 2013, when it stood at 3.93%. The average 15-year fixed was 3.23%.

The government's stimulus program has helped keep borrowing costs down. The Federal Reserve has been purchasing treasury bonds and mortgaged-backed securities for years, providing a steady market for mortgages.

But the Fed has cut back on its purchases, and plans to end the buying program entirely in October, reducing demand for mortgage bonds. That should eventually cause rates to climb.

"Low mortgage rates and home prices that are climbing more slowly should boost the housing market," said to Keith Gumbinger, spokesman for hsh.com, a mortgage information company.

"That should provide a solid foundation for home sales this fall," he said.

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