Inflation worries, mortgage rates ease

Mortgage rates fell this week after price reports suggested inflation remains at bay, Freddie Mac said in releasing results of its Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage (FRM) averaged 5.38 percent with an average 0.7 point for the week ending June 18, down from 5.59 percent last week and 6.42 percent a year ago.

The 15-year FRM averaged 4.89 percent with an average 0.7 point, down from 5.06 percent last week and 6.02 percent a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.97 percent with an average 0.6 point, down from 5.17 percent last week and 5.89 percent a year ago.

One-year Treasury-indexed ARMs averaged 4.95 percent with an average 0.6 point, down from 5.04 percent last week and 5.19 percent a year ago.

Reports of benign inflation figures reversed the upward trend seen in mortgage rates in recent weeks, Freddie Mac Chief Economist Frank Nothaft said in a statement.

The producer price index rose only 0.2 percent in May, a third less than forecast, and the consumer price index increased by just 0.1 percent.

A 5 percent drop in producer prices from a year ago was the largest since 1949, and a 1.3 percent yearly decrease in consumer prices was the biggest since 1950.

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