Mortgage rates fell further this week to lows not seen since March on news that home prices are down from year-ago levels, according to surveys conducted by Freddie Mac and

In Freddie Mac’s survey, the 30-year fixed-rate mortgage dropped to an average 6.31 percent, down from last week when it averaged 6.4 percent; it is now at its lowest since the week of March 2, 2006, when it averaged 6.24 percent.

The 15-year fixed-rate mortgage also sank during the period, falling from 6.06 percent to 5.98 percent, and is at its lowest level since the week ending March 23, 2006, when it averaged 5.97 percent.

Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 6 percent this week, with an average 0.5 point, down from last week when it averaged 6.08 percent. The one-year Treasury-indexed ARM averaged 5.47 percent, with an average 0.6 point, down from last week when it averaged 5.54 percent.

“This week’s economic releases, which showed a slight one-year decline in both new- and existing-house prices in August, fell short of market expectations and prompted market analysts to reassess how much the housing sector will contribute to economic growth in the coming year,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a result, mortgage rates declined even further this week to match those set six months ago.

“One bright note in the releases was that the average time new homes stood for sale narrowed from 6.6 months to 6.3 months in August, which should mitigate some of the softening of new-home prices over the next few months. In addition, both lower mortgage rates and a moderation in house-price growth should lead to increased housing affordability — especially as family incomes are forecasted to continue rising.”

In’s survey, mortgage rates fell sharply on the heels of soft economic data, one week after the Federal Open Market Committee left interest rates unchanged. The average 30-year fixed mortgage rate is now 6.29 percent, the lowest since March 1. The 30-year loans had an average of 0.31 discount and origination points.

The average 15-year fixed-rate mortgage, popular for refinancing, fell below the 6 percent mark for the first time since the beginning of March, to 5.96 percent, according to On larger loans, the average jumbo 30-year fixed rate sank to 6.57 percent. Adjustable rate mortgages were also in on the act, with the average 5/1 ARM sinking to 6.07 percent and the average one-year ARM retreating to 5.9 percent. reported that fixed mortgage rates have been falling consistently for the past three months, but posted the biggest decline yet this week after disappointing economic data. A regional economic barometer released by the Federal Reserve Bank of Philadelphia ignited a bond-market rally over concerns that the economy was on the verge of a rapid slowdown, which also fueled speculation that the Fed’s next move may be to cut rates. The result was a sharp drop in government bond yields, particularly the 10-year Treasury note. Fixed mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates have dropped notably since the Fed last hiked rates at the end of June, reported. At the time, the average 30-year fixed mortgage rate was 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.29 percent, the same loan originated today would carry a monthly payment of $1,020. Fixed mortgage rates are a compelling refinancing alternative for adjustable-rate borrowers facing sharp payment adjustments, said.

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

New York – 6.24 percent with 0.08 point

Los Angeles – 6.32 percent with 0.46 point

Chicago – 6.41 percent with 0.06 point

San Francisco – 6.33 percent with 0.28 point

Philadelphia – 6.25 percent with 0.42 point

Detroit – 6.36 percent with 0.01 point

Boston – 6.33 percent with 0.15 point

Houston – 6.26 percent with 0.58 point

Dallas – 6.24 percent with 0.5 point

Washington, D.C. – 6.19 percent with 0.6 point

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