Mortgage rates decreased for the second week in a row according to the results of Freddie Mac's Primary Mortgage Market Survey for the previous week.

The 30-year fixed-rate mortgage (FRM) decreased from 6.69 percent with 0.5 point to 6.67 percent with 0.4 point. One year ago the 30-year FRM averaged 6.78 percent.

The 15-year FRM saw a similar decline, from 6.37 percent and 0.5 point to 6.34 percent with 0.4 point.

The interest rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) declined one basis point from the previous week to 6.30 percent while fees and points also dropped from 0.6 to 0.5. The one-year Treasury indexed ARM lost one basis point to average 5.65 percent and fees and points declined from 0.7 to 0.5.

According to Frank Nothaft, Freddie Mac vice president and chief economist, "Mortgage rates edged down slightly for the second week in a row after having risen over the previous month and a half, and as financial markets prepared for the June 28th Federal Open Market Committee's announcement on monetary policy."

"This week we saw further effects of the current housing recession. May's existing home sales (including condominiums and co-ops) fell 0.3 percent to the slowest pace since June 2003, and the number of months houses were available for sale rose to 8.9, the longest since June 1992. In addition, home prices fell 2.1 percent in twenty metropolitan areas for the year ending April 2007, according to the S&P/Case Shiller´┐Ż composite index, the largest year-over-year drop since the data began in January 2001."

Rates also dropped according to the Mortgage Bankers Association Weekly Mortgage Applications Survey for the week ending June 29. The results, delayed because of the Independence Day holiday, reported that the 30-year FRM had an average contract interest rate of 6.50 percent with 1.69 in points, including the origination fee. The previous week the 30-year averaged 6.60 percent with 1.54 points.

The average contract interest rate for a 15-year FRM decreased to 6.20 from 6.24 percent with points increasing from 1.41 to 1.43, and the one-year ARM averaged 5.49 with 1.17 points compared to 5.51 percent with 1.14 points a week earlier.

Application volume was virtually unchanged, increasing 0.1 percent on a seasonally adjusted basis and decreasing 0.1 percent unadjusted from the previous week. The volume, however, was 9.7 percent higher when compared to the same week in 2006.

Refinancing represented 37.8 percent of total applications compared to 38.7 percent the previous week. Adjustable rate mortgages had an increased market share; 21 percent compared to 20.4 percent a week earlier.