U.S. 30-year mortgage rates steady in latest week

WASHINGTON, Oct 2 (Reuters) - U.S. 30-year mortgage rates changed little in the latest week, according to a survey released on Thursday by home funding company Freddie Mac.

U.S. 30-year mortgage rates reached an average of 6.10 percent for the week ending Oct. 2, from 6.09 percent last week, while 15-year mortgages were at an average of 5.78 percent from 5.77 percent last week.

One-year adjustable rate mortgages, or ARMs, fell in the week to an average of 5.12 percent from 5.16 percent last week.

Freddie Mac said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, fell to an average of 6.00 percent compared with 6.02 percent a week earlier.

A year ago, 30-year mortgage rates averaged 6.37 percent, 15-year mortgages 6.03 percent, and the one-year ARM 5.58 percent. The 5/1 ARM averaged 6.11 percent.

Although average mortgage rates were fairly stable this week, the hike from two weeks ago caused the number of loan applications to drop 23 percent last week, according to the Mortgage Bankers Association.

"Consumers are feeling the effects of the slowing economy," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. "For example, consumer spending was unchanged in August and revised downward for the month of July."

Nothaft also noted that the Institute for Supply Management's manufacturing index dipped from 49.9 in August to 43.5 in September.

Nothaft explained that this indicated "further erosion in new orders, a decline in order backlog, and lessened production, suggesting further cutbacks in manufacturing activity in coming weeks."

Lenders charged an average of 0.6 percent in fees and points on 30-year mortgages, up from 0.7 percent last week.

Fees and points averaged 0.6 percent on 15-year mortgages and the 5/1 ARM, both unchanged from last week. The one-year ARM fees were 0.5 percent, also unchanged from last week.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio. (Reporting by Jasmin Melvin; Editing by Leslie Adler)