Mortgage rates headed lower over the past week -- reversing a three-week climb upward -- as the Federal Reserve indicated a steadfast position on its rate target and inflation concerns eased.

Freddie Mac(FRE)reported that long-term and short-term mortgages all declined, whether rates were fixed or adjustable.

Freddie's 30-year fixed-rate mortgages averaged 6.35%, with an upfront payment of six-tenths of a point. The rate is down from 6.45% a week ago and 6.63% a week earlier.

Shorter-term mortgage rates posted an even greater decline, with the 15-year FRM averaging 5.92% with the same upfront payment, down from last week when it averaged 6.04%. A year ago those loans averaged 6.30%.

Adjustable-rate mortgages also dropped, with five-year Treasury-indexed hybrids averaging 5.78%, down from 5.99%, with an upfront payment of seven-tenths of a point. One-year Treasury-indexed hybrids dropped to 5.17% from 5.27%, with an upfront payment of six-tenths of a point.

A year ago, five-year ARMs were 6.29% and one-year ARMs were 5.71%.

Frank Nothaft, Freddie Mac vice president and chief economist, attributed the drop to the Fed's statement that it expects inflation to moderate toward the end of the year. Judging from federal-funds futures data, he added, "market participants lowered somewhat their expectations of future rate hike hikes by the Fed compared to last week."

While mortgage rates are lower, Nothaft noted that homes are not necessarily more affordable, due to median-price increases in certain areas as sales picked up pace.

"However, even with the recent erosion in affordability," he said, "homes were still more affordable in April than during the 2005-2007 period of skyrocketing house prices."

That belief was further bolstered by a Commerce Department report on Friday showing that prices for consumer goods outside food and energy rose just 0.1%. Nothaft characterized the change as "timid."

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