NEW YORK (

TheStreet

) --

Mortgage rates

for 30-year fixed home loans fell to their lowest level in 60 years, the second consecutive week of new lows, according to new data released Thursday, but potential homebuyers continue to stay on the sidelines.

The average rate on a 30-year fixed mortgage decreased to 4.09% over the past week,

Freddie Mac

(FMCC)

said Thursday, down from 4.12% in the prior week. That marked the lowest rate on record since 1951.

>> 14 REITs Increasing Dividends Annually

Rates on 15-year mortgages fell to 3.3% from 3.33%; economists estimate it's the lowest ever rate for the popular refinancing option.

Potential homebuyers have not been taking advantage of these record low rates -- below 5% for all but two of the last 52 weeks -- as an uncertain economic outlook, stubbornly high unemployment and still-tight lending practices make purchasing homes out of the question, or simply too risky an investment, for most Americans.

>> No Housing Turnaround Anytime Soon: Analyst

Even so, the Mortgage Bankers Association said Wednesday mortgage application activity increased 6.3% last week, with the purchase index rising 7% week over week and the refinance index rising 6%.

Despite the weekly gains noted by the MBAA, sales of newly built homes are expected to be at their worst levels for decades this year, while sales of previously occupied homes are on pace for their worst rate in nearly 15 years.

>> Flagging Economy Gives 15-Year Mortgages New Life

Certain loan customers may get better rates from credit unions than from banks

, though banks tend to have an advantage when it comes to mortgage rates, charging a 3.32% APR on 60-month adjustable rate mortgages to the credit unions' 3.77%, according to RateWatch data as reported by

MainStreet

last month. (A

comparison of the two institution types on fixed mortgages

conducted in December found a statistical dead heat, though some experts argued that credit unions have an advantage in that they tend to charge lower fees.)

But credit unions won on the other loan rates used in calculating the

Credit Power Index

, including personal unsecured loans (charging 10.49% to 12.54% at banks) and 36-month home equity loans (5.61% at credit unions, 6.75% at banks).

Stocks in the homebuilding sector were mixed but mostly higher Thursday, riding a general market rally.

PulteGroup

(PHM) - Get PulteGroup, Inc. Report

added 2.5%,

Lennar

(LEN) - Get Lennar Corporation Class A Report

, largely considered a leader among the homebuilders, gained 0.5%,

Toll Brothers

TheStreet Recommends

(TOL) - Get Toll Brothers, Inc. Report

added 0.8% and small-cap builders

Beazer Homes

(BZH) - Get Beazer Homes USA, Inc. Report

and

KB Home

(KBH) - Get KB Home Report

each rose 2.8%.

D.R. Horton

(DHI) - Get D.R. Horton, Inc. Report

shed 0.4%.

The

SPDR S&P Homebuilders

(XHB) - Get SPDR S&P Homebuilders ETF Report

and

iShares Dow Jones US Home Construction,

(ITB) - Get iShares U.S. Home Construction ETF Report

exchange-traded funds that track the sector remain around 70% and 80%, respectively, off their early 2006 peaks.

--

Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here:

Miriam Reimer

.

>To follow the writer on Twitter, go to

@miriamsmarket

.

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