Mortgage rates fell for the fifth week in a row, according to Freddie Mac.

The 30-year, fixed-rate mortgage averaged 6.48% for the week ended August 24, down from 6.52% the week prior. One year ago, the 30-year, fixed-rate averaged 5.77%. The average rate for the week is the lowest level since the week ended April 6.

The continued decline is partly due to the Federal Reserve's acknowledgment that it is closely watching the housing market slow down, according to Freddie Mac Chief Economist Frank Nothaft.

"Although this fuels arguments about whether we will experience a soft landing or a bubble, market watchers also perceive that it is possible that the Fed may stop raising short-term interest rates over the near term," he said. "This perception takes upward pressure off mortgage rates."

"Meanwhile, although both existing- and new-home sales for July fell below market expectations -- confirming the slowdown in the housing market," he continued. "We still expect 2006 to be the third highest year on record for total sales."

The 15-year, fixed-rate mrotgage averaged 6.18%, down from 6.20% the week prior. One year ago, the 15-year averaged 5.35%.

The five-year hybrd adjustable-rate mortgage averaged 6.14%, down from 6.18% the week prior. One year ago, the five-year averaged 5.30%.

The one-year adjustable-rate mortgage was also down for the week. It averaged 5.60%, down from last week's 5.65%. One year ago, the ARM averaged 4.56%.

The 30-year and 15-year fixed mortgages had a fee of 0.4% point, while the five-year required an average 0.5 point and the one-year required a 0.7 point.

The MBA survey released yesterday showed that lower interest rates have led to the refinancing of home loans. Applications for loans to purchase homes fell 1% for the week; however, refinancing applications were up 1.3%. Refinancings made up 40.6% of total loan applications.