Down for the fifth consecutive week, the 30-year fixed-rate mortgage fell by 6 basis points during the latest week to 6.15%, Freddie Mac’s latest survey of 125 mortgage-lending respondents showed. In the same week a year ago, the average was 5.74%.

The average 15-year fixed rate mortgage reportedly came in at 5.71 percent, or 5 BPS below the level a week earlier.

“Interest rates for long-term mortgages slipped lower this week due to some economic data releases that pointed towards more subdued inflation in the near term,” commented Freddie chief economist Frank Nothaft in a written statement.

Freddie’s updated forecast calls for a gradual rise in long-term rates throughout 2006, with the 30-year averaging 6.3% in the first quarter and ending the year at 6.5%. The Mortgage Bankers Association’s latest outlook has it averaging 6.2% and 6.6%, respectively.

Over the next 35 to 45 days, about 60 of the 100 mortgage bankers, brokers and individuals surveyed by Bankrate.com expected rates to rise and the remainder believed they’ll remain about the same.

Freddie said the 5-year Treasury-indexed hybrid adjustable-rate mortgage average slipped 2 BPS to 5.76% this week.

The 1-year Treasury-indexed ARMs reportedly averaged 5.15%, just 1 BPS lower than last week. The 1-year T-bill itself was 4.44% Wednesday, the Federal Reserve said.

Nothaft said shorter-term mortgage rates were basically unchanged due to market expectations of another rate hike by the Federal Reserve Board at the end of the month.

The 1-year ARM carried a rate that was 1.6 percentage points below that of the 30-year at the end of 2004, but only 0.9 percentage points lower at yearend 2005, according to Freddie’s forecast report. In 2006, the “inverting of the yield curve will put short- and long-term Treasury rates very close together,” with 1-year ARM ending the year at 5.5%, just 1% below the 30-year.

The ARM share of applications is already being hit, currently at 28%, it has decreased every week over the past month from 34%.

But overall mortgage application volume improved — by 10% from the previous week — for the first time in a month, the Mortgage Bankers Association reported. The upturn was due to a 10% boost in refinance requests, which accounted for 42% of total applications, and a 9% increase in purchase money requests.