Mortgage rates declined almost across the board for the week ending August 25 and 26, according to Freddie Mac and the Mortgage Bankers Association respectively. This is the second week in a row that leading mortgage rates have dropped following six straight weeks of mostly upward bound figures.

Freddie Mac's Weekly Primary Mortgage Market Survey reported that all four of the rates they track declined, on average, for the week. None of the declines exceeded five basis points, but, after all, any port in a storm.



The 30-year fixed rate dropped from 5.80 percent to 5.77 percent with fees and points holding steady at 0.5. The 15-year declined five basis points to 5.35 while fees and points went up from 0.5 to 0.6.

Adjustable rate mortgages were also down, from 5.34 to 5.30 percent in the case of the 5/1 ARM and from 4.58 to 4.56 percent for the 1-year ARM. Points and fees remained firm at 0.6 and 0.7 respectively.

These small downward adjustments returned rates to the levels that existed in late July and early August, depending on the product.

The Mortgage Bankers Association's Weekly Mortgage Applications Survey also tracked rates downward with the exception of the 1-year ARM.

The 30-year fixed rate declined to 5.73 percent from 5.78 percent while points increased to 1.21 from 1.20 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for 15-year fixed rate mortgages dropped to 5.36 percent from 5.41 percent the previous week. Points and fees were unchanged at 1.19.

The 1-year ARM was the exception for the week. It increased four basis points in the MBA survey to 4.88 percent and points popped up .01 to 1.06.

The MBA's survey of mortgage activity indicated that applications decreased 4.5 percent on a seasonally adjusted basis and 5.7 on an unadjusted basis. More interesting was the comparison of current mortgage activity with the same week in 2004. This was up 12.7 percent but the year to year increase had been running in the 20 percent range for some time.

Refinancing still represents a substantial part of all mortgage applications; 43.8 percent last week, compared to 43.7 percent a week earlier. ARMs garnered 27.8 percent of all mortgage applications, down from 28.1 the previous week.