It was nice while it lasted - one full week to be exact - but, according to Freddie Mac the mortgage market last week took back most of the rate decreases that were so welcome the week before. The Mortgage Bankers Association, however, recorded rate drops stretching into a second week.

Freddie's Weekly Primary Mortgage Market Survey of average contract interest rates indicated that the 30-year fixed-rate mortgages increased from 6.74 percent during the week of July 13 to 6.80 percent for the week of July 20. This was one basis point higher than the rate the week of July 6. Fees and points were down 0.1 to 0.5.

The 15-year fixed rate mortgage was up four basis points to 6.41 percent with fees and points unchanged at 0.4. This was still an improvement over the July 6 rates of 6.44 and 0.5 points.

The 5/1-year hybrid adjustable rate mortgage increased only slightly from 6.33 percent with 0.5 points to 6.36 percent with 0.6 points, again less than the 6.39 with 0.6 points reported two weeks ago.

The traditional 1-year adjustable rate mortgage moved up 5 basis points to 5.80 and fees and points increased from 0.6 to 0.7. Again the July 6 rates were higher at 5.83 percent with 0.8 points.

Freddie Mac's chief economist Frank Nothaft indicated that rate increases reflected a market that was still spooked by the specter of increasing inflation. "However, Fed Chief Bernanke, in his semi-annual speech to Congress, hinted that another hike in overnight lending rates might not be imminent and financial markets breathed a collective sign of relief which should be reflected in the results of next week's survey."

The MBA's Weekly Mortgage Applications Survey for the week ended July 21 revealed different results. The average contract rate for 30-year fixed-rate mortgages dropped four basis points to 6.69 percent and points decreased from 1.13 to 1.07, including the origination fee. 15-year fixed-rate mortgages decreased from 6.38 percent to 6.31 percent and points were also down to 1.02 from 1.07. The one-year ARM was also lower by 3 basis points to 6.25 percent with points decreasing to 0.83 from 0.85. This puts substantial daylight between the Freddie Mac and the MBA figures for the same product.

All reports are for 80 percent loan to value originations.

Mortgage activity continues to trend down. The application volume decreased 1.3 percent on a seasonally adjusted based and a fraction less when unadjusted. Compared to the same week in 2005, however, the pace was off 28.2 percent.

Refinancing as a share of all mortgage activity was up to 35.6 percent compared to 35.0 the previous week and adjustable rate mortgages represented 28.6 percent of total applications compared to 29.0 percent the week before.