The wild gyrations in mortgage rates that characterized much of the first quarter of this year appear to be a distant memory at this point, as mortgage rates were mostly unchanged last week according to a report Thursday by Freddie Mac (FRE). Average rates on a traditional 30-year fixed-rate mortgages fell slightly this week, dropping 3 basis points to 5.98 percent with an average 0.5 point, the GSE said. Rates are well below year-ago levels, when they averaged 6.37 percent. 15-year fixed-rate mortgages averaged 5.55 percent with an average 0.6 point, Freddie Mac said, down from last week when it averaged 5.60 percent. A year ago at this time, the 15-year FRM averaged 6.06 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.61 percent this week, with an average 0.6 point, up from last week when it averaged 5.57 percent. A year ago, the 5-year ARM averaged 6.02 percent. "Interest rates for fixed-rate mortgages fell slightly this week on news of both weaker industrial production in April and consumer sentiment falling in May to its lowest level since June 1980," said Frank Nothaft, Freddie Mac vice president and chief economist. Weak economic results tend to boost demand for Treasury and mortgage bonds, which in turn decreases bond yields, and tends to ease rate pressure on traditional mortgages. Rates on adjustable rate mortgages, however, moved upward slightly as the market digested sentiment that the Federal Reserve may be done cutting its target Federal Funds rate in the near term. One-year Treasury-indexed ARMs averaged 5.24 percent this week with an average 0.6 point, up6 basis points from last week when it was 5.18 percent, Freddie Mac said. "The federal funds futures market suggests virtually no change in monetary policy over the next few months and the Fed viewed the last rate cut to be a 'close call,' according to the minutes of its most recent policy Committee meeting," Nothaft said. Nothaft also suggested that if anything, rates aren't likely to increase in the near term. "Housing woes still plague the economy," he said. "Although housing starts unexpectedly rose in April, all of the gains were in multifamily properties. New construction on one-unit homes fell to 692,000 homes (annualized), which was the least since January 1991 and almost 62 percent below the peak set in November 2005. "In addition, homebuilder confidence matched an all-time record low in May." For more information, visit http://www.freddiemac.com. Disclosure: The author held no positions in FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.