Mortgage rates fell for the second consecutive week as slower economic growth eased inflation concerns, according to surveys conducted by Freddie Mac and Bankrate.com.

In Freddie Mac’s survey, the 30-year fixed-rate mortgage dropped to an average 6.63 percent this week, down from last week’s average of 6.72 percent. The average for the 15-year fixed-rate mortgage also sank from last week, falling from 6.34 percent to 6.27 percent.

Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.3 on the 30- and 15-year loans.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6.27 percent this week, with an average 0.4 point, down from last week when it averaged 6.35 percent. The one-year Treasury-indexed ARM averaged 5.69 percent, with an average 0.7 point, down from last week when it averaged 5.78 percent.

“Second-quarter Gross Domestic Product (GDP) came in weaker than the market had expected. This means inflation is less of a threat, and that translates into lower mortgage rates,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. “Although lower rates are a welcome sight, we still feel that the 30-year fixed-rate mortgage rate will drift up and down somewhat over the next few months, but will average less than 7 percent for the year.”

In Bankrate.com’s survey, mortgage rates declined for the third time in the last four weeks on the heels of slower second-quarter economic growth. The average 30-year fixed-rate mortgage fell to 6.65 percent, the lowest since April 26, and these loans had an average of 0.3 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, dropped by a similar amount to 6.3 percent, according to Bankrate.com. On larger loans, the average jumbo 30-year fixed rate declined to 6.86 percent. Adjustable-rate mortgages also declined, with the average 5/1 ARM sliding to 6.36 percent, and the average one-year ARM retreating to 6.03 percent.

Validation that the economy did indeed grow at a slower pace pushed mortgage rates lower this week, Bankrate.com noted. The initial Gross Domestic Product for second quarter revealed a growth rate of 2.5 percent, but mortgage rates have fallen by one-quarter percentage point in the past month on mounting evidence that the economy is downshifting. Slower economic growth increases demand for long-term government bonds and reduces fears of inflation over a long horizon. Both send Treasury yields lower, and mortgage rates are closely related to yields on long-term Treasury securities.

Bankrate.com noted that fixed mortgage rates are nearly three-quarters of a percentage point higher than one year ago. One year ago, the average 30-year fixed mortgage rate was 5.91 percent, meaning that the monthly payment on a loan of $165,000 was approximately $980. With the average 30-year fixed rate now 6.65 percent, the same loan originated today would carry a monthly payment of $1,059. Despite recent increases, fixed mortgage rates remain an attractive refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments, according to Bankrate.com.

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

New York – 6.58 percent with 0.18 point

Los Angeles – 6.68 percent with 0.5 point

Chicago – 6.81 percent with 0.04 point

San Francisco – 6.69 percent with 0.24 point

Philadelphia – 6.56 percent with 0.41 point

Detroit – 6.73 percent with no points

Boston – 6.66 percent with 0.15 point

Houston – 6.68 percent with 0.39 point

Dallas – 6.58 percent with 0.48 point

Washington, D.C. – 6.5 percent with 0.64 point

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