Bailout Bill Puts Dent in Mortgage Rates

Mortgage rates have eased over the past week as President Bush signed into law an emergency plan to rescue Fannie Mae(FNM Quote) and Freddie Mac(FRE Quote), which hold nearly half the country's housing debt.

Freddie Mac said in its weekly mortgage-rate report Thursday that short-term, long-term, fixed and adjustable rates all swooned. The lender attributed the drop to lower commodity prices as well, which eases concerns about inflation, despite mixed reports on the housing market.

Freddie's 30-year fixed mortgages averaged 6.52% with an upfront payment of seven-tenths of a point, down from 6.63% a week earlier. Shorter term 15-year fixed mortgages averaged 6.07% with a payment of six-tenths of a point, down from 6.18%.

Five-year adjustable-rate mortgages that are indexed to Treasury notes averaged 6.07% with a payment of six-tenths of appoint, down from 6.16%. One-year ARMs posted an average rate of 5.27% with the same payment, down from 5.49%. ...