Freddie Mac's Primary Mortgage Market Survey for the previous week showed both long and short term mortgage rates easing off slightly after three straight weeks of rising numbers. The rates reported from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the same week, however, increased for longer term mortgages.

Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) decreased five basis points to 6.37 percent with fees and points remaining steady at 0.5. One year ago this week the 30-year FRM averaged 6.30 percent.

The 15-year FRM averaged 6.03 percent compared to 6.09 percent for the week ended September 27. Fees and points were unchanged at 0.5. One year ago the 15-year mortgage averaged 5.98 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.11 percent this week with an average 0.6 point, down from last week when it averaged 6.15 percent with 0.5 point but higher than the average of 6.0 one year ago.

The one-year Treasury-indexed ARM averaged 5.58 percent; last week it averaged 5.60 percent. Fees and points increased from 0.6 to 0.7. At this time last year, the 1-year ARM averaged 5.46 percent.

Frank Nothaft, Freddie Mac vice president and chief economist released a statement saying "Mortgage rates eased slightly this week following three weeks of increases. The initial effects of the credit market turmoil that began in August are starting to emerge in housing statistics. New home sales in August fell to the slowest pace in more than seven years and the median sales price had the largest twelve-month decline since 1970. Moreover, August's pending existing home sales fell to the lowest level on record, which begins in 2001.

"Prior to August, the housing sector had already lost 260,000 jobs over the twelve-month period ending July 2007 while the overall economy had a net gain of 1.8 million new non-farm payroll employees. In addition, the housing market (through consumption and investment) shed about a percentage point off of GDP growth for the twelve-month period ending June 2007."

The MBA survey indicated that longer term mortgage rates increased during the week with the 30-year FRM rising from 6.32 percent with 1.09 points, including the origination fee to 6.40 percent with 1.0 point.

The 15-year FRM was also up, rising from 5.95 percent to 6.03 percent while points increased from 1.07 to 1.12.

Short term interest rates did drop; the one-year ARM decreased to 6.15 percent from 6.21 percent with points increasing to 0.92 from 0.89.

Application volume was up slightly, with a 2.4 percent increase on both a seasonally adjusted and unadjusted basis from the previous week; the volume was up 8.6 percent compared with the same week in 2006.

Refinancing as a share of all mortgage activity increased to 46.2 percent from 46.0 percent the previous week while the ARM share continues to drop, representing only 13.6 of all applications compared to 13.8 percent one week earlier.