Mortgage Rates Fell This Week Amid Lower Commodity Prices

New York, NY (AHN) - Mortgage rates declined over the past week as the month ends led by the drop in oil prices and U.S. Senate approved a housing bill over the weekend to rescue America's battered housing market.

The Senate, met in a rare weekend session on Saturday, voted 72 to 13 in favor of the bill that offers up to $300 billion in loan guarantees for homeowners to get cheaper loans.

The new law will also be used to rescue the beleaguered firms, Fannie Mae and Freddie Mac, which have found difficult to raise fresh capital enough to shore up its weakened balance sheet.

The two giant mortgage lenders have portrayed a grim picture of the housing and credit markets in the United States over the past few weeks as investors speculated that government can rescue the sinking firms.

A report released by Freddie Mac indicate that rates of 30-year fixed-rate mortgages (FRMs) averaged 6.52 percent for the week ended July 31, compared to 6.63 percent last week, and 6.68 percent registered during the same week last year.

While, the 15-year FRM was recorded to be around 6.07 percent this week, from 6.18 percent last week, and 6.32 percent a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.07 percent with a payment of six-tenths of appoint, compared to 6.16 percent last week and 6.29 percent a year ago.

One-year ARMs recorded to be at an average rate of 5.27 percent with the same payment, down from 5.49 percent last week and 5.59 percent a year ago..

"Mortgage rates moved lower this week as a drop in commodity prices eased market concerns over inflation pressures," said Freddie Mac chief economist Frank Nothaft in a statement.

"A drop in commodity prices eased market concerns over inflation pressures," he added.