Mortgage rates fall

NEW YORK (CNNMoney.com) -- Fears of a slowing economy over the next few months helped push mortgage rates lower, Freddie Mac reported Thursday.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.33 percent for the week ended Oct. 25, down from 6.4 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.40 percent.

"How much of a drag the housing slump will be on the economy remains unknown," said Frank Nothaft, Freddie Mac's (Charts, Fortune 500) chief economist, in a statement. "Additionally, recent reports suggest some regional manufacturing weakness in October."

"Meanwhile, sales of existing single-family homes in September dropped to the slowest pace in nearly a decade - since January 1998 - reflecting the effects of the credit tightening that occurred in August," he said.

In its latest report, Freddie Mac said rates on 15-year fixed-rate loans averaged 5.99 percent in the latest week, down from 6.08 percent last week. A year ago, the 15-year rate averaged 6.10 percent.

Five-year adjustable-rate mortgages (ARMs) averaged 6.03 percent this week, down from 6.11 percent last week. A year ago, the 5-year ARM averaged 6.14 percent.

One-year ARMs averaged 5.66 percent this week, down from 5.76 percent last week. They were at 5.60 percent this time last year.