Long-term mortgage rates dropped for the third consecutive week, as increasing oil and gas prices created economic uncertainty, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 5.71 percent for the week ended today, down from last week when it averaged 5.77 percent. The average for the 15-year fixed-rate mortgage this week is 5.32 percent, down from last week when it averaged 5.35 percent. Points on the 30-year averaged 0.6, while points on the 15-year averaged 0.5.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5 percent this week, with an average 0.6 point, unchanged from last week. The one-year Treasury-indexed ARM averaged 4.48 percent this week, with an average 0.7 point, down from last week when it averaged 4.56 percent.

“Market jitters about high energy costs and the spill over into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates.

“As if all that wasn’t enough, the devastation caused by Hurricane Katrina and the echo effects on future energy prices in the U.S. may mean that mortgages rates will fall even further in the coming days ahead.”

In Bankrate.com’s survey, the average 30-year fixed rate mortgage fell from 5.86 percent to 5.8 percent this week. The 30-year fixed rate mortgages in this week’s survey had an average of 0.36 discount and origination points.

The average 15-year fixed mortgage rate retreated from 5.47 percent to 5.43 percent, while the average jumbo 30-year fixed-rate mortgage dipped from 6.04 percent to 5.98 percent. Adjustable-rate mortgages were split, with the average 5/1 adjustable-rate mortgage dropping from 5.47 percent to 5.41 percent, while the average one-year ARM climbed from 4.92 percent to 4.95 percent. The gap between the average 30-year fixed rate and the one-year adjustable rate is the narrowest since May 2001, Bankrate.com reported.

Higher prices for oil and gasoline are nothing new, but Hurricane Katrina’s destruction along the Gulf Coast has brought oil drilling and refining to a virtual standstill. Rising energy prices hamper consumer spending, and the resulting economic uncertainty has renewed demand for the safety of Treasury securities. As bond prices rise, bond yields fall. Fixed mortgage rates are closely related to yields on long-term government bonds.

While many adjustable-rate mortgages are resetting to higher rates, fixed mortgage rates are much lower than three years ago, according to Bankrate.com. Three years ago, the average 30-year fixed rate was 6.3 percent, and a loan of $165,000 carried a monthly payment of $1,021. With the average 30-year fixed rate now 5.8 percent, a loan of $165,000 now has a monthly payment of $968. Instead of facing unpredictable payment increases, an attractive alternative is refinancing into a fixed-rate loan, Bankrate.com reported.

The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:

New York – 5.74 percent with 0.16 point

Los Angeles – 5.83 percent with 0.55 point

Chicago – 5.91 percent with 0.01 point

San Francisco – 5.87 percent with 0.34 point

Philadelphia – 5.7 percent with 0.36 point

Detroit – 5.79 percent with 0.27 point

Boston – 5.89 percent with 0.11 point

Houston – 5.78 percent with 0.75 point

Dallas – 5.83 percent with 0.58 point

Washington, D.C. – 5.65 percent with 0.53 point

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