Rate Decline Temporary

The 30-year fixed-rate mortgage averaged 5.77%, dipping three basis points from last week and not far off the 5.82% average a year ago, according to Freddie Mac’s latest survey of 125 mortgage-lending companies, thrifts and commercial banks.

“Although mortgage rates slipped a little again this week, I do see rates trending upward over the year,” said Freddie chief economist Frank Nothaft in an announcement.

The mortgage “experts” surveyed by Bankrate.com this week seemed to be under the same notion; half the panel predicted rates would stay about the same over the next 35 to 45 days, one-third saw rates rising and only 17% foresaw a downturn.

Fannie Mae’s August forecast has the 30-year averaging near its current level this quarter, edging up to 5.83% next quarter and remaining under 5.90% throughout 2006 — unlike the outlooks by Freddie and the Mortgage Bankers Association, which believe it will reach 6% by the end of this year and in the first quarter, respectively.

The average 15-year fixed rate fell five basis points during the week to 5.35%, Freddie said.

The 10-year Treasury, which tends to move with fixed rates, was yielding 4.15% today at a price of 100.72.

The average for 5-year Treasury-indexed hybrid adjustable-rate mortgages reportedly came in at 5.30%, slipping four BPS from a week ago.

The 1-year Treasury-indexed ARM average decreased the least — two BPS to 4.56% this week, Freddie said. The ARM pricing index, the 1-year T-bill, was 3.87% as of Wednesday, barely changed from a week ago.

Traffic at mortgage shops was barely changed as the volume of 1003s lessened about 1% for the week ending Aug. 19, according to the Mortgage Bankers Association latest Weekly Mortgage Applications Survey. Purchase money loan requests were off 2%, while refinance application activity was down 1%.

The refinance share of total mortgage applications increased to nearly 44% from 42% the previous week, MBA said, and the ARM share edged down to 28%.