Once again Freddie Mac is reporting that mortgage rates are down from the preceding week and have now reached levels not seen since late March and early April.

The Primary Mortgage Market Survey for the week ended August 31 reported that the 30-year fixed-rate mortgage averaged 6.44 percent with an average of 0.4 points compared to the average the previous week of 6.48 percent. This is the lowest level for the 30-year since April 6 when the average was 6.43 percent.



The 15-year fixed-rate mortgage averaged 6.14 percent and 0.4 points, down 4 basis points from the week ended August 24. One year ago the 15-year averaged 5.32 percent but this weeks rate was the lowest level for the 15-year mortgage since April 6 when it was 6.10 percent.

The 5/1 hybrid ARM was down to 6.11 percent from 6.14 the week before. The 5/1 last saw this level during the week of March 30 when it averaged 6.02 percent.

The traditional 1-year Treasury-indexed ARM averaged 5.59 percent with 0.7 points, down only a smidgen from 5.60 the previous week. The 1-year hit its last most recent low during the week ended April 6 when it was 5.57 percent.

Fees and points for all products were unchanged this week from August 24.

Frank Nothaft, Freddie Mac vice president and chief economist said, "Mortgage rates continued to drift lower this week in large part because of the cooling in the housing market and in consumer confidence, thus giving financial markets reason to believe that economic growth will moderate and inflation will remain in check," As a matter of fact, the 30-year FRM (fixed rate mortgage) is nearly 40 basis points lower than its peak of 6.8 percent in July of this year.

"By some indicators, personal incomes are growing faster than the cost of housing. Combined with the still historically low mortgage rates, this will help to support the housing industry as it levels off from the record highs of the last few years."

The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ended September 1 on Wednesday and it also showed mortgage rates moderating downward. In the case of the 30-year fixed rate mortgage, the survey indicated that the average contract interest rate dropped to 6.31 percent from 6.39 percent with points, including the origination fee, increasing from 1.03 to 1.10.

The 15-year fixed-rate mortgage dropped from 6.06 percent to 5.97 percent with points increasing to 1.14 from 1.06 and the 1-year ARM decreased to 5.91 percent from 5.97. In this case points also were down from 0.91 to 0.83.

All rates quoted are for 80 percent loan to value mortgages.

The Market Composite Index, a measure of mortgage application activity, increased 1.8 percent on a seasonally adjusted basis from the week of August 25 and 0.4 percent unadjusted. Again the pace of applications lagged far behind that of one year ago, down 26.1 percent from the same week in 2005.

Refinancing activity was down slightly. During the week ended September 1 it represented 41.0 percent of all mortgage applications compared to 41.5 percent the previous week. The market share of adjustable rate mortgages, at 26.2 percent, reached the lowest level it has seen since October 2003;. One week ago ARMs made up 26.8 percent of the market.