McLean, VA – According to Freddie Mac Primary Mortgage Market SurveySM (PMMSSM) the 30-year fixed-rate mortgage (FRM) averaged 6.31 percent with an average 0.4 point for the week ending September 28, 2006, down from last week when it averaged 6.40 percent. Last year at this time, the 30-year FRM averaged 5.91 percent. This is the lowest the 30-year FRM has been since the week of March 2, 2006, when it averaged 6.24 percent.

The 15-year FRM this week averaged 5.98 percent with an average 0.4 point, down from last week when it averaged 6.06 percent. A year ago, the 15-year FRM averaged 5.48 percent. This is the lowest the 15-year FRM has been since the week ending March 23, 2006, when it averaged 5.97 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.00 percent this week, with an average 0.5 point, down from last week when it averaged 6.08 percent. A year ago, the five-year ARM averaged 5.44 percent. This is the lowest the 5-year ARM has been since the week ending March 23, 2006, when it averaged 5.96 percent.

One-year Treasury-indexed ARMs averaged 5.47 percent this week with an average 0.6 point, down from last week when it averaged 5.54 percent. At this time last year, the one-year ARM averaged 4.68 percent. The 1-year ARM has not been lower since the week ending March 23, 2006, when it averaged 5.41 percent.

"This week's economic releases, which showed a slight one-year decline in both new and existing house prices in August, fell short of market expectations and prompted market analysts to reassess how much the housing sector will contribute to economic growth in the coming year," said Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, mortgage rates declined even further this week to match those set six months ago. One bright note in the releases was that the average time new homes stood for sale narrowed from 6.6 months to 6.3 months in August, which should mitigate some of the softening of new home prices over the next few months. In addition, both lower mortgage rates and a moderation in house price growth should lead to increased housing affordability – especially as family incomes are forecasted to continue rising."

Source: Freddie Mac