Mortgage rates fell this week, erasing most of last week's big increase, Freddie Mac said Thursday.

Thirty-year mortgages averaged 5.74 percent this week, after climbing to 5.82 percent last week, the highest level in a month.

Rates on 30-year mortgages hit a high this year of 6.34 percent the week of May 13. During the late spring and early summer, rates slowly drifted downward as economic activity cooled, easing fears about inflation. However, since late August, rates have been rising and falling in a seesaw pattern as markets have responded to a variety of mixed signals on economic growth.

Economists said the latest drop in interest rates reflected market disappointment about the latest unemployment report, which showed a lower-than-expected 96,000 payroll jobs were added in September.

"The decline in mortgage rates was primarily due to a weak employment report for September, which suggested economic growth is still a bit subdued," Freddie Mac chief economist Frank Nothaft said. "As a result, we expect mortgage rates will continue to stay quite affordable over the next few months, benefiting future homebuyers."

For 15-year fixed-rate mortgages, a popular option for refinancing, rates dropped this week to 5.14 percent, from 5.24 percent last week.

Rates on one-year adjustable rate mortgages declined to 4.01 percent this week, from 4.08 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Each mortgage type carried a 0.6 point fee.

Home sales are expected to hit record highs this year, aided by low mortgage rates.

A year ago, rates on 30-year mortgages averaged 5.95 percent with 15-year mortgages at 5.26 percent and one-year ARMs at 3.69 percent.

AWARDS . . . Chesapeake Construction Co. was named the best of show award winner Thursday at the FFL Monument Awards, an annual competition for local home builders sponsored by the Northern Virginia Building Industry Association and the Maryland-National Capital Building Industry Association. Chesapeake won for its work on a custom home costing more than $2 million. The groups also gave a lifetime achievement award to Diane Cox Basheer of Diane Cox Basheer Communities. Builders also received awards in 65 categories of different types of housing at different prices levels.

EVENTS . . . Author Joshua Olsen is to discuss the career of the late developer James Rouse, founder of Rouse Co. and the planned community of Columbia. The discussion is scheduled for 6:30 to 8 p.m. Thursday at the National Building Museum, 401 F St. NW, Washington. Admission is $15, $10 for students; registration is required. For information, call 202-272-2448; Web site:

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