NEW YORK (CNNMoney.com) -- Mortgage rates retreated from a two-year high this week, brought down by signs that the economy is cooling, Freddie Mac reported Thursday.

The average rate on 30-year fixed-rate loans fell to 6.72 percent for the week ending July 27 from 6.80 percent the week before.

A year ago, the 30-year mortgage rate averaged 5.77 percent.

"Mortgage rates drifted lower this week on indications that economic growth is moderating, inflation remains under control and the Fed just may pause raising rates for awhile," Frank Nothaft, Freddie Mac vice president and chief economist said in a prepared statement.

"Meanwhile, recently released new homes sales for June fell to a lower than expected rate," he added. "That drop can be traced directly to higher mortgage rates, which are also helping to slow the growth of house prices in 2006."

Freddie Mac said the 15-year rate slipped to an average of 6.34 percent from 6.41 percent the previous week. A year ago, the 15-year rate averaged 5.34 percent.

Five-year adjustable-rate mortgages edged lower to 6.35 percent last week. The five-year ARM averaged 5.27 percent a year ago.

The average one-year adjustable-rate mortgage also fell, slipping to 5.78 percent from 5.80 percent. At this time last year, the loan averaged 4.46 percent.

For homeowners using adjustable rate mortgages, a rise in interest rates can mean ballooning payments.

The Mortgage Bankers Association estimates that some $330 billion worth of ARMs will adjust in 2006 and $1 trillion worth will reset by the end of 2007.

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