On Monday, The Federal Reserve Bank of New York started buying mortgage backed securities from Freddie Mac, Fannie Mae and Ginnie Mae. This is part of the government's $500 billion program to jump-start the housing market. Whether or not it will work remains to be seen.
But there has been one very positive result already. Some of the nation's largest banks, including Chase and Wells Fargo, have starting offering mortgages at below 5% for 30 year, fixed rate loans.
If you are considering purchasing a home or refinancing an existing mortgage, you may want to apply now. Banks are swamped and it is taking 2 months to process the applications.