The rate on 30-year mortgages had climbed for 10 weeks in a row.

01:00 AM EST on Monday, November 28, 2005

BY JEANNINE AVERSA
Associated Press

WASHINGTON --

Mortgage rates around the country, which have been trending upward, dropped last week, offering a dose of good news for prospective homebuyers.

Mortgage giant Freddie Mac reported Wednesday in its weekly survey that rates on 30-year, fixed-rate mortgages averaged 6.28 percent. That's down sharply from the previous week's rate of 6.37 percent, which was the highest in more than two years and marked the 10th week in a row that rates on 30-year mortgages rose.

Analysts attributed the decline in mortgage rates to reduced fears on the part of investors about inflation getting out of control.

"Lower oil prices -- at least compared to the last several months -- have helped to alleviate some of the inflation fears that the market has been experiencing lately," said Frank Nothaft, Freddie Mac's chief economist.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.81 percent, down from 5.90 percent the previous week.

One-year adjustable-rate mortgages dipped to 5.14 percent, compared with 5.20 percent the previous week. Rates on five-year hybrid adjustable-rate mortgages averaged 5.75 percent, down from 5.86 percent.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.6 point; one-year ARMs had a 0.7 point and five-year hybrid ARMs carried a fee of 0.8 point.

A year ago, 30-year mortgages averaged 5.72 percent, 15-year mortgages were at 5.15 percent and one-year ARMs averaged 4.27 percent. Freddie Mac does not have historical data on the five-year ARM, which it began tracking this year.