Another week, another drop in mortgage rates

Freddie Mac survey reveals 30-year slips as signs of housing sector slowdown continue to build.
NEW YORK (CNNMoney.com) — Mortgage rates slipped for the fifth straight week on continued signs of weakness in the housing sector and speculation the Fed will leave interest rates untouched in the near term, Freddie Mac reported Thursday.

The average rate on 30-year fixed-rate loans fell to 6.48 percent for the week ending Aug. 24 from 6.52 percent the week before.

A year ago, the 30-year mortgage rate averaged 5.77 percent. The last time the 30-year rate was this low was the week of April 13, 2006.

“The Fed has acknowledged that it is closely monitoring the housing market as it slows down from last year’s record pace,” Frank Nothaft, Freddie Mac vice president and chief economist, said in prepared statement. “Although this fuels arguments about whether we will experience a soft landing or a bursting housing bubble, market watchers also perceive that it possible that the Fed may stop raising short-term interest rates over the near term. This perception takes upward pressure off mortgage rates.

“Meanwhile, although both existing and new home sales for July fell below market expectations – confirming the slowdown in the housing market – we still expect 2006 to be the third highest year on record for total sales.”

Freddie Mac said the 15-year rate slipped to 6.18 percent from the previous week average of 6.20 percent. A year ago, the 15-year rate averaged 5.35 percent.

The last time the 15-year rate was this low was the week of April 20, 2006 when it was 6.17 percent.

Five-year adjustable-rate mortgages fell to 6.14 percent from 6.18 percent last week.

The five-year ARM averaged 5.30 percent a year ago.

The average one-year adjustable-rate mortgage fell to 5.60 percent from 5.65 percent the previous week. At this time last year, the loan averaged 4.56 percent.