Mortgage rates continued to decline; most rates have little change from where they were in late July 2006. The decline was caused by the lower treasury yields.

Freddie Mac's Primary Mortgage Market Survey for the week ended July 26 reported that the 30-year fixed-rate mortgage (FRM) averaged 6.69 percent with an average 0.4 point. This was a slight change from the previous week when the 30-year averaged 6.74 percent also with 0.4 point. It was also only a small change from the average of 6.72 percent exactly one year ago.

The 15-year FRM this week averaged 6.32 percent with an average 0.3 point, down from last week when it averaged 6.37 percent. A year ago, the 15-year FRM averaged 6.27 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.29 percent this week, with an average 0.5 point, down from last week when it averaged 6.30 percent. A year ago, the 5-year ARM averaged 6.27 percent.

One-year Treasury-indexed ARMs averaged 5.59 percent this week with an average 0.5 point, down from last week when it averaged 5.69 percent. At this time last year, the 1-year ARM averaged 5.69 percent.

"Market investors seeking safety from the subprime fallout bought Treasury securities, pushing bond yields down and allowing mortgage rates to drift a bit lower," said Frank Nothaft, Freddie Mac vice president and chief economist. "Sales of new and existing homes fell in June, and prices continue to weaken, especially in the markets that had recorded the strongest gains over the past few years. There are early signs, however, that the market is stabilizing. As construction spending levels off, the drag on GDP growth will continue to diminish. Meanwhile, the 5 percent rise in pending home sales in June suggests that sales in July and August may reverse last month's decline."
 
Source: Freddiemac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com