Mortgage Rate Down 5th week

Mortgage rates fell for the 5th week in a row. The Federal Reserve's acknowledgment that it is closely monitoring the housing market as it slows from last year's record pace could possible be a factor behind this fall-back. Lenders are speculating that the Fed might stop raising short-term interest rates over the near term.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.48% in the week that ended today -- down from its 6.52% average last week. At this time last year, the loan averaged 5.77%. The 15-year fixed rate averaged at 6.18% this week, again a fall from last week's 6.20%. At this time last year this rate was 5.35%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged at 6.14% decreasing from last week's 6.18%. This rate averaged 5.30% a year ago. The 1-year Treasury-indexed ARMs have an average rate of 5.60%, down from last week's rate of 5.65%. At this time in 2005, the 1-year ARM averaged only 4.56%.

Meanwhile, both existing- and new-home sales for July fell below market expectations -- confirming the slowdown in the housing market. However, Freddie Mac still expects 2006 to be the 3rd highest year on record for total sales.