Average Rates Drop, Ending Three-Week Rise

The average 30-year fixed mortgage rate fell to 6.35% from 6.45% over the seven-day period ended July 3. The average 15-year fixed mortgage rate dropped to 5.92% from 6.04%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages slipped to 5.78% from 5.99% and the average rate for one-year Treasury-indexed ARMs declined to 5.17% from 5.27%, Freddie Mac reported. Fees and points averaged 0.6 of a point for fixed-rate mortgages and one-year ARMs, and 0.7 of a point for hybrid ARMs. "Mortgage rates reversed their three-week rise, falling this week after the release of the latest Federal Reserve's policy statement that it expects inflation to moderate later this year and the reporting of May's timid increase in core personal consumption prices," said Frank Nothaft, Freddie Mac vice president and chief economist. "According to recent trading activity in federal funds futures, market participants lowered somewhat their expectations of future rate hikes by the Fed compared to last week." A year ago, the average 30-year and 15-year fixed mortgage rates were 6.63% and 6.30%, respectively, and the average hybrid and one-year ARM rates were 6.29% and 5.71%, Freddie Mac said. Freddie can be found online at http://www.freddiemac.com.