Mortgage Rates Drop for Sixth Week to Hit New Lows

""Freddie Mac"":http://www.freddiemac.com released the results of its latest mortgage rate survey on Thursday, which shows slower economic activity pushing fixed-rate mortgages slightly lower for the sixth consecutive week. The GSE says both the 30-year and 15-year rates dropped to new lows for 2011.

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Freddie Mac's ""weekly market survey"":http://www.freddiemac.com/pmms/ is based on data reported from approximately 125 lenders across the country.

It showed that the 30-year fixed-rate mortgage averaged 4.60 percent (0.7 point) for the week ending May 26, edging down from 4.61 percent last week. As a point of comparison, last year at this time, the 30-year rate averaged 4.84 percent.

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The average rate on a 15-year fixed mortgage came in at 3.78 percent (0.7 point) this week. It was 3.80 percent last week and 4.21 percent a year ago.

Adjustable-rate mortgages (ARMs), which some industry experts say are gaining in popularity with borrowers, also dropped this week.

Freddie reports that the 5-year ARM is now averaging 3.41 percent (0.5 point), down from 3.48 percent last week and 3.97 percent this time last year.

The 1-year ARM averaged 3.11 percent this week (0.5 point), compared to 3.15 percent a week ago and 3.95 percent 12 months ago.

In addition to exceptionally low mortgage rates, depressed home prices are making homeownership more affordable for most people but that trough may be closer than some think, according to Frank Nothaft, Freddie Mac's chief economist.

""U.S. house prices indexes may be nearing a bottom soon,"" Nothaft said. ""On a national basis, prices fell 0.3 percent between February and March, which was the smallest decline since November 2009, according to the Federal Housing Finance Agency. In addition, four of the nine Census Regions exhibited positive growth, compared to none in February.""