On July 3, 2008, Freddie Mac released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage averaged 6.35 percent for the week ending July 3, 2008. This was down from the week before when it averaged 6.45 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 6.63 percent.

The 15-year fixed-rate mortgage last week averaged 5.92 percent with an average 0.6 point, down from the previous week when it averaged 6.04 percent. A year ago at this time, the 15-year fixed-rate mortgage averaged 6.30 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.78 percent last week, down from the week before when it averaged 5.99 percent. A year ago, the 5-year adjustable-rate mortgage averaged 6.29 percent. Meanwhile, one-year Treasury-indexed adjustable-rate mortgages averaged 5.17 percent last week, down from the previous week when it was 5.27 percent. At this time last year, the 1-year adjustable-rate mortgage averaged 5.71 percent.

"Mortgage rates reversed their three-week rise, falling this week after the release of the latest Federal Reserve's policy statement that it expects inflation to moderate later this year and the reporting of May's timid increase in core personal consumption prices," said Frank Nothaft, Freddie Mac's vice president and chief economist. "According to recent trading activity in federal funds futures, market participants lowered somewhat their expectations of future rate hike hikes by the Fed compared to last week."

"Housing affordability fell in April due to gains in median house prices during the month, according to the National Association of Realtors," he added. "However, even with the recent erosion in affordability, homes were still more affordable in April than during the 2005-2007 period of skyrocketing house prices."