Mortgage rates fell for a second consecutive week on signs of weakness in the economy, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.

Rates on 30-year fixed-rate mortgages averaged 4.78 percent with an average 0.7 point for the week ending April 28, down from 4.8 percent last week and 5.06 percent a year ago.

The 30-year fixed-rate mortgage, which hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.

Rates on 15-year fixed-rate mortgages averaged 3.97 percent with an average 0.7 point, down from 4.02 percent last week and 4.39 percent a year ago. The 15-year fixed-rate mortgage hit a low in records dating back to 1991 of 3.57 percent in November.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loan averaged 3.51 percent with an average 0.6 point, down from 3.61 percent last week and 4 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARM loans averaged 3.15 percent with an average 0.6 point, down from 3.16 percent last week and 4.25 percent a year ago.

"Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices," said Frank Nothaft, Freddie Mac chief economist, in a statement.

"Regional Federal Reserve Banks reported that business and manufacturing activities declined in Philadelphia, Dallas and Richmond in April," Nothaft said. "In addition, the Standard & Poor’s/Case-Shiller 20-city composite home price index recorded year-over-year declines through February in 19 of the 20 markets."

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans falling a seasonally-adjusted 13.6 percent during the week ending April 22 compared to the week before.

The decline was driven by a 26.6 percent decrease in applications for government-backed loans, as premium increases on FHA loans announced Feb. 14 went into effect. Buyers trying to beat the deadline were probably responsible for a 20 percent increase in government purchase loan applications during the preceding four weeks, said Michael Fratantoni, MBA’s chief economist.

Demand for purchase loans slipped to its lowest level since Feb. 25, and was down 28.8 percent from the same week a year ago.

In an April 14 forecast, MBA economists said they expect rates on 30-year fixed-rate loans will average 5.1 percent during April, May and June, and climb to an average of 5.6 percent during the final three months of the year.

MBA economists expect a more gradual rise in rates on 30-year fixed-rate loans next year, to an average of 6 percent in the final three months of 2012.

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