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

WASHINGTON, Sept 18 (Reuters) - U.S. 30-year mortgage rates fell slightly in the latest week, according to a survey released on Thursday by home funding company Freddie Mac.

U.S. 30-year mortgage rates dropped to an average of 5.78 percent from 5.93 percent last week, while 15-year mortgages dipped to an average of 5.35 percent from 5.54 percent last week.

One-year adjustable rate mortgages, or ARMs, also fell in the week to an average of 5.03 percent from 5.21 percent last week.

Freddie Mac said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.67 percent compared with 5.87 percent a week earlier.

A year ago, 30-year mortgage rates averaged 6.34 percent, 15-year mortgages 5.98 percent and the one-year ARM 5.65 percent. The 5/1 ARM averaged 6.21 percent.

For the fifth week in a row, 30-year mortgage rates have fallen, totaling a 0.75 percent drop.

"As a result, mortgage applications surged nearly 58 percent since Aug. 15, largely led by a 122 percent gain in applications for refinancing, according to the Mortgage Bankers Association," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

"The MBA also reports that fixed-rate mortgages are currently the predominant choice among homebuyers and families looking to refinance," he added. "Over the first two weeks of September, 95 percent of new applications were for fixed-rate mortgages."

Nothaft noted that applications for ARMs have fallen by almost 50 percent since the end of 2007.

Lenders charged an average of 0.6 percent in fees and points on 30-year mortgages and the 5/1 ARM, both unchanged from last week.

Fees and points also averaged 0.6 percent on 15-year mortgages, up from 0.5 percent last week. The one-year ARM fees were 0.5 percent, down from 0.6 percent a week ago.

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)