[See 10 Affordable Mountain Towns for Retirees.]

[Check out Low Mortgage Rates: 7 Things You Need to Know to Refinance.]

Lock or wait?: Could rates move lower from current, ultra-low levels? Sure. If the U.S. economy slows sharply or a fresh crisis rattles global confidence, consumers could see financing costs become even cheaper. But given that rates are now sitting near 40-year lows, you're better off locking in a rate today rather than holding out for a better deal. "The likelihood of getting a significantly lower interest rate is pretty slim," Gumbinger says.

The European debt crisis also juiced demand for another class of assets that has helped bring down mortgage rates. With stocks looking increasingly risky, investors began searching for safe places to park their money. "What they really want to do is buy something that is government-guaranteed," says Guy Cecala, the publisher of Inside Mortgage Finance. "And there really are only two choices: Treasury securities, which have a very low yield, or going for a little higher yield with [Fannie Mae or Freddie Mac mortgage backed-securities]." While many investors purchased U.S. Treasuries, others–tempted by the possibility of slightly higher returns–took the second option. The subsequent "huge" demand worked to reduce the yields on these mortgage-backed securities, which translated into lower rates on home loans, Cecala says.

[Slide Show: 10 Cities for Real Estate Steals.]

At the same time, a sluggish economy works to ease investor concerns over future price appreciation. "The other part that controls long-term interest rates is inflation expectations," says Brad Hunter, the chief economist at Metrostudy, a firm that researches the housing industry. "And I believe that the bond market sees very little inflation in the near term." Zach Pandl, an economist at Nomura Securities, agrees. "The risk today is of excessively low inflation," Pandl says. "There is no inflation on the horizon." As such, Pandl expects the Federal Reserve to hold its benchmark federal funds rate in the current zero to 0.25 percent range for the foreseeable future.

Weak U.S. economy: Mortgage rates have dipped to record lows in large part because "frankly, the economy is lousy," says Keith Gumbinger of HSH Associates, a publisher of consumer loan information. The national unemployment rate remains uncomfortably high at 9.5 percent, and Nomura Securities expects forthcoming data to show that U.S. economic growth slowed in the second and third quarters. A weak economy puts downward pressure on mortgage rates in several ways. "First and foremost, demand for credit is low," Gumbinger says. As a result, lenders in many cases must reduce rates to attract borrowers. "Basic supply and demand," Gumbinger says.

European debt crisis: Developments in the global economy have created additional downward pressure on home loan rates. When the shaky balance sheets of several European countries spooked financial markets in late spring, investors scurried out of risky assets like stocks and into U.S. Treasury bonds. As demand increased, yields on 10-year treasuries fell to 3.05 percent for the week ending July 16, down from 3.85 percent three months earlier. And since fixed mortgage rates tend to track the yields on 10-year treasuries, home loan costs declined significantly as well.

Outlook: Although mortgage rates may increase from these record lows by the end of the year, they are likely to remain in an attractive range, Hunter says. "But I think that probably we will get a modest increase in long-term interest rates by the end of next year," Hunter says. "By then, the economy will have started creating jobs and [have] started to take up some of the slack capacity in industrial production." Thirty-year fixed mortgage rates could approach 6 percent by the end of 2011,Citizens of Humanity, he says.

But that doesn't mean everyone will be able to get their hands on today's lowest financing costs. After getting hammered by bad loans made during the housing boom, banks have increased their lending standards for borrowers of all stripes. To obtain today's best rates on a home purchase loan, borrowers will typically need a FICO score of 720 or higher, a down payment of around 10 percent–although it could be significantly higher in certain markets–and fully documented income and assets, Gumbinger says. For the best rates when refinancing your home, you'll generally need a FICO score of 730, at least 20 percent equity in your home,Juicy Couture belts, and at least two years of tax returns, Cecala says.

[See also 6 Reasons the Housing Market Hasn't Recovered.]

While the rules may not be as damaging as feared, they will likely limit the sector’s growth rates and make it tough for them to raise tuition, analysts said. With more Congressional hearings planned, the drive to increase oversight of the for-profit sector might not be over, said Credit Suisse analyst Kelly Flynn.

The Education Department estimates that the new rules would make just 5 percent of for-profit college programs ineligible for aid starting in the 2012-13 academic year,Ed hardy t-shirts, if they make no changes to their programs. It said that 55 percent of all programs would fall into neither the eligible nor ineligible categories, but could face restrictions on enrollment growth and be required to tell potential students about the high debt of its graduates.

Shares of other companies in the industry mostly rose. Strayer Education Inc. gained $15.68, or 7 percent, to $234.88, while Lincoln Educational Services added 49 cents to $21.44 and Grand Canyon Education Inc. rose $1.06, or 5 percent, to $22.74.

A new “gainful employment” rule would cut government aid to schools if too many students default on loans, or earn too little, after graduation.

Shares of for-profit education companies jumped, with some of the biggest gains among companies such as DeVry Inc. and Apollo Group Inc., which analysts say would be least affected by the new rules.

“(The) new gainful employment proposal is fair and reasonable and tries to catch the bad actors while not hurting the good ones,” Sterne Agee analyst Arvind Bhatia wrote in a note to clients.

The proposals are part of an overhaul of regulations of the for-profit education sector, which has come under scrutiny from the Obama administration over rising student loan defaults and questionable recruiting practices. Shares have tumbled for more than a year in anticipation that new rules would reduce federal aid, often the schools’ biggest source of revenue. Most schools, except for those with the highest loan default rates, would still be eligible for the federal student loans, which can make up as much as 90 percent of their revenue, Signal Hill analyst Trace Urdan said.

NEW YORK – Shares of for-profit education companies soared Friday after the Department of Education proposed new rules that should allow most schools in the industry to continue to receive federal loan funds.

Schools will be ineligible for federal student loans if less than 35 percent of former students are paying off loans and graduates have a debt-to-earnings ratio above 30 percent of discretionary income and 12 percent of total income.

Under the proposals, to remain eligible for aid, schools must show that at least 45 percent of former students are paying off their federal aid dollars, or that graduates have a debt-to-earnings ratio of less than 20 percent of discretionary income or 8 percent of total income.

But companies such as ITT Educational Services Inc., Corinthian Colleges Inc., Education Management Corp. and Career Education Corp., that operate career colleges focusing more on 2-year programs or lower-income students may need to make big changes, analysts said. Their shares were mixed. ITT rose 4 cents to $85.22 and Corinthian dipped 19 cents to $10.06. Education Management rose $1.07, or 7 percent, to $16.24 and Career Education gained 57 cents to $25.11.