Mortgage rates rise, pushing home prices down
Rates up for second time in three weeks; 30-year fixed hits 6.40 percent.

NEW YORK ( -- Mortgage rates rose for the second time in three weeks, and the 30-year returned to levels of 5 weeks ago, according to a survey released Thursday.

The 30-year fixed-rate mortgage (FRM) averaged 6.40 percent for the week ending Oct. 26, up from 6.36 percent, according to Freddie Mac's (Charts) Primary Mortgage Market Survey. A year ago, the 30-year FRM averaged 6.15 percent.

The 15-year FRM averaged 6.10 percent this week, up from 6.06 percent last week. A year ago, it averaged 5.69 percent.

Rates for five-year adjustable-rate mortgages (ARMs) came in at 6.14 percent this week, up from 6.11 percent last week. A year ago, they averaged 5.63 percent.

One-year ARMs averaged 5.60 percent, up from 5.57 percent last week. A year ago, the one-year ARM averaged 4.91 percent.

"At its most recent meeting, the Federal Reserve again declined to raise rates for the third time, citing a slowdown in the housing market," said Frank Nothaft, Freddie Mac's chief economist, in a statement. "For instance, the median price of both new and existing homes in September posted significant decreases. And some areas of the country may experience a few bumps up and down as the housing industry corrects itself in the coming months."

"On a positive note, new home sales in September came in at a higher-than-expected pace. This should help support housing prices going forward."

Freddie Mac competes on the secondary market with Citigroup (Charts), Countrywide Financial (Charts) and Fannie Mae (Charts).

Beware the mortgage time-bomb That ridiculously low-rate ARM seemed like such a good idea at the time. But now, payments will be coming due in a big, big way.

Realtors: Home sales weaker, prices lower Trade group expects 1.6 percent rise in median prices, a smaller increase than forecast last month.

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