Mortgage Rate Resumes Downslide

After last week's rise (that came after 6 successive weeks of decline), Mortgage rates resumed their downfall again sliding to levels seen in the spring. We expect the long term rate to undergo fluctuations like this within a range of 6.25% and 6.75% throughout the rest of the year - in particular, in a week like this before Fed meets on 20th and traders get some indication of what the Fed thinks about American economy and inflation.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.43% in the week that ended today -- down from its 6.47% average last week. At this time last year, the loan averaged 5.74%. The 15-year fixed rate averaged at 6.11% this week, again a slide from last week's 6.16%. At this time last year this rate was 5.32%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged at 6.10% decreasing from last week's 6.14%. This rate averaged 5.26% a year ago. The 1-year Treasury-indexed ARMs have an average rate of 5.60%, down from last week's rate of 5.63%. At this time in 2005, the 1-year ARM averaged only 4.46%.