For the fifth straight week Freddie Mac reported that mortgage rates fell from the previous week's level. During the past week which ended August 24 all four the of the mortgage products tracked by Freddie Mac reached levels last seen at some point this past April. The Mortgage Bankers Association, however, found rates moving in the opposite direction.

According to Freddie Mac's Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 6.48 percent with an average 0.4 point. This was a decrease of 4 basis points from the rate reported for the week ended August 17 but fees and points were up 0.1 from the previous week. This week's 30-year rate was 42 basis points lower than the week of July 20, the last time a rate increase was noted.



The 15-year fixed-rate mortgage averaged 6.18 percent and 0.4 points compared with 6.20 percent with 0.3 points the previous week.

The five-year treasury indexed adjustable rate mortgage fell four basis points to 6.14 percent although fees and points increased from 0.4 to 0.5 and the one-year ARM averaged 5.60 percent, 5 basis points lower than one week earlier. Points, however, increased from 0.5 to 0.7.

Frank Nothaft, Freddie Mac vice president and chief economist said that "The Fed has acknowledged that it is closely monitoring the housing market as it slows down from last year's record pace. Although this fuels arguments about whether we will experience a soft landing or a bursting housing bubble, market watchers also perceive that it is 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."

MBA's Weekly Mortgage Applications Survey for the week ended August 25, however, once again headed in the opposite direction of the Freddie Mac report with all of the products the survey tracks drifting up, albeit most only slightly.

The average contract interest rate for a 30-year fixed-rate mortgage was up 1 basis point to 6.39 percent with points including the origination fee moving from 0.98 to 1.03. The 15-year fixed-rate loan increased from 6.04 percent to 6.06 percent while points fell to 1.06 from 1.12.

One-year ARMS did increase more robustly to 5.97 percent from 5.91 percent with points also increasing to 0.91 from 0.82. All rates quoted are for 80 percent loan to value originations.

Mortgage application volume was down very slightly - 0.9 percent on a seasonally adjusted basis and 2.3 percent unadjusted. Once again applications were way off the pace of a year ago, down 22.4 percent from the same week in 2005.

Refinancing activity increased nearly a full percent (41.5 percent compared to 40.6 percent) from a week earlier and the share of adjustable rate originations were also up from 26.4 to 26.8 percent of all mortgages.