Freddie Mac’s Primary Mortgage Market Survey is out, and shows that mortgage rates dropped modestly last week, ending months of upward trending.

…the 30-year fixed-rate mortgage (FRM) averaged 6.69 percent with an average 0.5 point for the week ending June 21, 2007, down from last week when it averaged 6.74 percent. Last year at this time, the 30-year FRM averaged 6.71 percent. The 15-year FRM this week averaged 6.37 percent with an average 0.5 point, down from last week when it averaged 6.43 percent. A year ago, the 15-year FRM averaged 6.36 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.31 percent this week, with an average 0.6 point, down from last week when it averaged 6.37 percent. A year ago, the 5-year ARM averaged 6.32 percent.

Freddie chief economist Frank Nothaft said that the housing market has negatively impacted economic growth at a faster rate than in the back half of 2006:

“Mortgage rates eased this week due to market concerns that the housing market will be a longer drag on the economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “May’s housing starts fell for the first time in four months, while homebuilder optimism in June fell to a sixteen-year low. “Thus far this year, the housing sector directly shaved 0.8 percentage points off real economic growth in the first quarter, compared to the 1.2 percentage points it lopped off growth in the second half of 2006.”