Freddie Mac reported a seven basis points decline in 30- and 15-year fixed mortgage rates to 6.40% and 5.93%, respectively. 

Meanwhile, five-year hybrid ARM and one-year ARM rates rose four basis points to 6.03% and 5.33%. 

According to Freddie Mac, fixed rates benefited from recent reports of economic weakness, while ARMs were influenced by the FOMC minutes and the prospects of an increase in the Fed Funds rate at some point.

For the month of August, the 30-year fixed mortgage rate averaged 6.48%, up five basis points from July's average.  In the first three weeks of August, the Refinance Index has averaged 1049, down nearly 19% from July's average. 

As this indicates, prepayment speeds will continue to slow. At this time, the outlook for September (reported in October) has speeds lower by 7% to 8%. For August, speeds are seen slowing 10% as mortgage rates averaged 11bps higher in July from June, while refinancings average 6% lower.

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