Mortgage rates drop again

NEW YORK (CNNMoney.com) -- Interest rates on fixed-rate home loans fell again this week on weak housing prices and consumer spending, Freddie Mac said Thursday.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan fell to an average 5.96 percent for the week ended Dec. 6. That was down from 6.10 percent a week ago.

At this time last year, the 30-year fixed-rate mortgage averaged 6.11 percent. It has not been lower since the week ending Sept. 29, 2005, when it averaged 5.91 percent.

"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Freddie Mac (Charts, Fortune 500) chief economist Frank Nothaft said in a statement.

"Currently, the federal funds futures market has almost a 100 percent probability that the Fed will lower rates in its December 11 policy committee meeting," Nothaft added. "These combined factors will likely diminish upward pressures on mortgage rates over the next few months."

Freddie Mac said rates on 15-year fixed-rate loans averaged 5.65 percent, down from 5.73 percent last week. A year ago, the 15-year rate averaged 5.84 percent. The 15-year rate has not been lower since the week ending Oct. 13, 2005, when it averaged 5.62 percent.

Five-year adjustable-rate mortgages (ARMs) averaged 5.75 percent this week, down from 5.86 percent last week. The five-year ARM averaged 5.92 percent at this time last year.

One-year Treasury-indexed ARMs averaged 5.46 percent, up from 5.43 percent last week. At this time last year, the 1-year ARM averaged 5.43 percent.