While home buyers may have plenty of options for cheap financing, they won’t have much choice about what properties they can purchase

As mortgage rates continue to decline to new record lows, prospective home buyers are facing a frustrating situation: Cheap financing is everywhere, but there’s seldom a home to buy.

The 30-year fixed-rate mortgage averaged 2.88% for the week ending August 6, dropping 11 basis points from the week prior, Freddie Mac FMCC, +1.91% reported Thursday. It was the eighth time this year the benchmark mortgage rate slipped to a record low. In comparison, these loans had an average rate of 3.6% a year ago.

The 15-year fixed-rate mortgage dropped seven basis points to an average of 2.44%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell by only four basis points to 2.9%.

Concerns about the state of unemployment nationwide and lawmakers’ delays in approving a new stimulus package pushed rates lower. The yield on the 10-year Treasury note flirted with record lows this week. Because mortgage rates are long term rates, they have historically moved roughly in line with the direction of the 10-year Treasury.

“Recently, downward pressure on mortgage rates has been consistent, but a combination of factors — including increased demand from borrowers and reluctance from lenders to push rates lower — had kept them afloat,” said Zillow ZG, +0.06% economist Matthew Speakman. “But the inability for the federal government to agree to a new fiscal relief bill last week finally tipped rates over the edge and down to new all-time lows.”