Holiday bargains aren’t the only things consumers are shopping for this week.

Thanks to the government’s plan to buy $600 billion of mortgage debt, mortgage rates on fixed 30-year loans declined this week, ushering in a slew of mortgage applications. While the spread between mortgages and treasuries is still wide, some economists say now is the time to apply for that new loan if you have a good credit score.

“Whenever mortgage rates are in the mid-five percent range, they tend to stay there for a short period of time,” said Bob Walters, chief economist at Quicken Loans. “This is a great opportunity. If interest rates go lower you can refinance again. If interest rates go higher then you missed your chance.”

On Tuesday, the Federal Reserve announced it will purchase as much as $600 billion worth of mortgage-backed assets from fledgling companies in hopes of jump-starting lending by banks nationwide. The Fed plans to purchase mortgage obligations worth $100 billion from Fannie Mae (FNM) and Freddie Mac (FRE) as well as the Federal Home Loan Banks. Also the Treasury said it would provide $20 billion of credit protection to the Federal Reserve in connection with its $200 billion Term Asset Backed Securities Loan Facility, which is designed to support small business and consumer loans.

The result of the actions has been a decline in mortgage rates. According to Bankrate.com the mortgage rate on a 30-year fixed mortgage is 5.76%, down from 6% last week. And Freddie Mac said earlier in the week that long term mortgage rates fell for the fourth week in a row.  

At Quicken Loans, on Tuesday and Wednesday the amount of mortgage applications quadrupled, even though this time of year is slow for the mortgage company because of the holiday season. Walters said most of the applications are coming from those that are refinancing existing loans, with the average borrower having a better credit quality.

“People have been waiting on the sidelines, and are watching interest rates drop now,” said Walters. He said people looking to refinance can react the quickest to declining rates because they don’t have to find a property to buy.

According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending November 21, volume was 404.4, an increase of 1.5% on a seasonally adjusted basis from 398.6 a week earlier. On an unadjusted basis, the index fell 1% compared with the previous week. Data for this week isn’t out yet.

Still for some borrowers the lower mortgage rates don’t mean they can refinance or get that elusive mortgage loan.

Borrowers that are sitting on properties that are worth less than their mortgage and/or have a less than stellar credit score aren’t likely to have an easier time getting mortgages, even with the government actions, said Walters of Quicken. The majority of people can still refinance but that there is a “substantial” minority that may be frozen out, he said.

“Its sill pretty difficult to get a mortgage,” added Douglas Smith, the chief economist for the Americas at Standard Chartered Bank. “The banks are still pretty unwilling to lend.” Smith said that while rates have come down they are still high in comparison to Treasuries. “The government is moving in the right direction to get the banks to lend,” said Smith, noting that its not clear when mortgage rates will go lower or when the credit markets will open up to people that don’t have perfect credit scores.

What’s more, Smith said the increase in mortgage applications can be a little deceiving, since people typically apply for mortgages via multiple brokers to get the best rate.

“Mortgage application data…is an imperfect measure of what’s exactly happening in the mortgage market,” said Smith.