Mortgage Rate Down After Federal Rate Cut

This was the first week after last Friday when the Federal Reserve had its first cut (since June, 2003) in its short term interest rate ... and it seems the mortgage market was quick to response to such a gesture of goodwill from the central bank. The 30-year fixed-rate mortgage rate sank this week to their lowest point since late May.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage went down to 6.52% from last week's average of 6.62%. The rate was 6.48% one year back. The current rate is the lowest rate since the week ending May 31, when rates stood at 6.42%. In mid-June, however, the rate had climbed to 6.74%, the highest for this year. The 15-year fixed rate averaged at 6.18% this week -- down slightly from last week's average of 6.30%. At this time last year this rate was 6.18%.

The 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) also changed to 6.34% -- only a little bit from last week's average of 6.35%. The hybrid averaged 6.14% a year ago. One-year Treasury-indexed ARMs averaged 5.60%, down from 5.67% of last week. This rate averaged 5.60% a year ago.