Mortgage rates in the US dropped as 30-year fixed-rate mortgages fell to an average of 4.93% on 18th February 2010, down from 4.97% the week before and from 5.04% in February 2009, according to Freddie Mac.

Fifteen-year fixed-rate mortgages averaged 4.33% for the week ending 18th February which were down from 4.34% the previous week and from 4.68% a year ago.

Frank Nothaft, vice president and chief economist at Freddie Mac, said: "Mortgage rates eased for the second week, while economic data releases suggest that the housing market may be in a slow state of recovery."

According to the National Association of Home Builders, US home builders were feeling more confident that the housing market is recovering as they were encouraged by the low interest rates and the restoration of federal home-buyer tax credits.

Nothaft said: "The National Association of Realtors reported that existing home sales rose in 48 states and the District of Columbia between the third and fourth quarters of 2009 and 32 states experienced double-digit growth. In addition, 67 metropolitan areas saw positive annual house price growth in the fourth quarter, more than double than in the third quarter, according to the NAR."