The average 30-year fixed rate was 6.06% in Freddie Mac’s survey of 125 thrifts, commercial banks and mortgage lending companies for the week ending May 1. The 30-year climbed from 6.03% last week but was 10 basis points lower than a year earlier.

The 15-year averaged 5.59%, falling from 5.62% in the prior week, Freddie reported.

“This week saw little change in mortgage rates on mixed news of higher inflation and a weaker housing market,” Freddie’s Chief Economist Frank Nothaft said in the announcement.

Fixed rates tend to move with the yield on the 10-year Treasury, which was 3.71% near midday, according to CNNMoney. A week ago, the 10-year yielded 3.79%.

Bankrate.com reported that 56 of the 100 panelist it surveyed for the week May to May 7 project rates will rise by more than 2 BPS during the next 35 to 45 days. The rest were evenly split over whether rates would fall or stall.

The Federal Open Market Committee announced yesterday a 25 BPS reduction in the federal funds rate, to 2.0%, and a similar reduction in the discount rate, leaving it at 2.25%.

“Recent information indicates that economic activity remains weak, ” the Fed explained in its statement. “Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.”

The Fed warned that some indicators of inflation expectations have recently risen. It noted that its easing of monetary policy and moves to improve market liquidity should promote moderate growth and mitigate economic risks.

Freddie said the average 5-year Treasury-indexed hybrid adjustable-rate mortgage came in at 5.73%, rising from 5.68% seven days prior.

The 1-year Treasury-indexed ARM averaged 5.29%, unchanged from a week earlier, according to Freddie’s latest survey. The 1-year Treasury itself yielded 1.85% yesterday, 2 BPS higher than a week earlier.

The yield on the 6-month London Interbank Offered Rate was 2.99% as of yesterday, according to Bankrate.com. LIBOR, which is also used as an ARM index, yielded 3.04% a week prior.

Another ARM index, the New York Funding Rate, will be rolled out as soon as next week by ICAP PLC, the Wall Street Journal reported. NYFR will be based on a survey of 40 banks about their 1-month and 3-month borrowing costs.

ARMs accounted for 6% of total applications tracked by the Mortgage Bankers Association in its survey for the week ending April 25, edging down from 7% the prior week.

Hurt by a 17% decline in refinance applications, overall applications were down 11% on a seasonally-adjusted basis in MBA’s survey, leaving the Market Composite Index at 567.0. On an unadjusted basis, 1003s were off 14% from a year earlier.

Seasonally-adjusted purchase applications fell 5% and government applications were off 4%, MBA reported.

Refinances represented 46% of applications, MBA said, falling from 49% the previous week.