Freddie Mac’s results of its latest Primary Mortgage Market Survey® (PMMS®) for the week ending October 23, 2008 showed that the 30-year fixed-rate mortgage fell sharply this week, plunging to its lowest level in five weeks. The 30-year, fixed-rate mortgages averaged 6.04 percent this week with an average 0.6 point down from last week when it averaged 6.04 percent down from 6.46 percent last week. The decline made the 30-year rates down to the lowest level since they stood at 5.78 percent the week of Sept. 18. Last year at this time, the 30-year FRM averaged 6.33 percent.

Rates on 30-year mortgages was at 6.63 percent in late July, the highest for this year and then plunged to a seven-month low of 5.78 percent the week of Sept. 18.

According to the Freddie Mac survey, rates on other types of mortgages were mixed this week.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.06 percent this week, with an average 0.6 point, down from last week when it averaged 6.14 percent. Last year at this time, the 5-year ARM averaged 6.03 percent.

One-year Treasury-indexed ARMs averaged 5.23 percent this week with an average 0.5 point, up from last week when it averaged 5.16 percent. Same time last year, the 1-year ARM averaged 5.66 percent.

"Long-term mortgage rates fell this week amid news of tame inflation and a weaker housing market," said Frank Nothaft, Freddie Mac vice president and chief economist. "Consumer prices were unchanged in September and core prices, which exclude food and energy products, rose by only 0.1 percentage point, all below the market consensus. On a year-over-year basis growth in core consumer prices remained at a 2.5 percent clip.

"New construction on one-family homes fell 12 percent in September to an annual rate of 544,000 homes, the lowest since February 1982. One-unit housing starts are now 70 percent below its peak set in January 2006, according to the Department of Commerce. Meanwhile, homebuilder confidence reached an all-time record low in October since the National Association of Homebuilders first began polling in January 1985."

Source: FreddieMac's Weekly Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com