The Federal Reserve pushed interest rates lower in December, and mortgage rates quickly followed. According to Freddie Mac, the national average for a conventional 30-year fixed-rate loan fell from 6.1 percent in November to 5.19 percent in late December, the lowest rate on record dating back to 1971. The Fed's actions reflect the government's ongoing commitment to stabilize the economy.

In other news, existing home sales decreased according to a December report published by the National Association of REALTORS (NAR). Existing home sales activity was revised downward to 4.49 million units, representing a 10.6 percent decrease from the same time a year ago. Existing-home sales include single family homes, townhomes, condos, and co-ops.

Lawrence Yun, NAR chief economist, expected a decline and added, "We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001."

Despite the overall decline in sales across the country, rising activity in California, Nevada, Arizona and Florida markets seems to signal a renewed interest in these areas, as bargain hunters take advantage of discounted homes.

Total housing inventory rose 0.1 percent in November to 4.20 million existing homes for sale. This representing an 11.2-month supply, up from a 10.3-month supply the month before.