Mortgage rates ease slightly

NEW YORK (CNNMoney.com) -- Mortgage rates eased this week after rising substantially over the past two months, Freddie Mac reported Thursday.

The government-sponsored loan buyer said the average rate on a 30-year fixed-rate loan declined to 6.69 percent for the week ending July 26 from 6.73 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.72 percent.

"Mortgage rates eased this week on market concerns that a further weakening of housing demand this spring will delay any recovery in the sector," said Frank Nothaft, Freddie Mac (Charts, Fortune 500) chief economist, in a statement. "For example, building permits fell last month to the slowest pace in a decade, and more recent data on June sales of existing home showed a fourth consecutive monthly decline."

"Several factors contributed to the softening in housing markets this spring. In addition to the tightening of lending standards earlier this year, especially on subprime loans, the 40 basis point jump in rates on 30-year fixed-rate mortgages in June may have deterred potential buyers. For the year-to-date, sales of single-family homes were down about 9 percent from the first half of 2007."

In its latest report, Freddie Mac said that rates on 15-year fixed-rate loans averaged 6.37 percent in the latest week, down from 6.38 percent last week. A year ago, the 15-year rate averaged 6.34 percent.

Five-year adjustable-rate mortgages (ARMs) averaged 6.30 percent this week, down from 6.35 percent last week.

A year ago, the 5-year ARM averaged 6.35 percent.

One-year ARMs averaged 5.69 percent this week, down from 6.72 percent last week. At this time last year, they averaged 5.78 percent.