UPDATE 1-US 30-, 15-year mortgage rates fall in latest week

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WASHINGTON, July 3 (Reuters) - U.S. 30- and 15-year mortgage rates fell in the latest week, according to a survey released on Thursday by home funding company Freddie Mac.

U.S. 30-year mortgage rates inched lower to an average of 6.35 percent from 6.45 percent last week, while 15-year mortgages dipped to an average of 5.92 percent from 6.04 percent.

One-year adjustable rate mortgages, or ARMs, also fell in the week to an average of 5.17 percent from 5.27 percent.

Freddie Mac said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.78 percent, down from 5.99 percent a week earlier.

A year ago, 30-year mortgage rates averaged 6.63 percent, 15-year mortgages 6.30 percent and the one-year ARM 5.71 percent. The 5/1 ARM averaged 6.29 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 vice president and chief economist, in a statement.

"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," he added.

Last week the Commerce Department said the core personal consumption expenditure price index rose 0.1 percent in both May and April.