Adjustables slip to 41% of market.

Adjustable-rate mortgages lost some ground in July to fixed-rate loans, according to a monthly survey by the Federal Housing Finance Board.

Forty-one percent of home loans made in July carried adjustable rates, down two percentage points from the June level.

The share of loans with adjustable rates "may have peaked, but will hover at 40%" for the next couple of months, said Mark Obrinsky, senior economist at Fannie Mae, the Federal National Mortgage Association.

Analysts weren't sure why the ARM share of the market took a slight dip in July.

Typically, consumers prefer ARMs to fixed-rate loans when interest rates are rising. At such times, the rates on ARMs are significantly lower than those on 30-year fixed-rate loans.

That spread between the two types of loans has fluctuated between 3.0% and 3.5% over the last few months, according to Paul Havemann, vice president of HSH Associates in Butler, N.J.

"I don't know why it dropped," Mr. Havemann said.

"There's a lot of psychology in these things."

Fannie Mae's Mr. Obrinsky said that rates on 30-year mortgages have been edging down slightly, making them somewhat more attractive.

Fannie Mac forecasts that a slowing economy will push rates down to 8.25% by the end of the year. In response, adjustable-rate mortgages will fall to about 35% of the market, Mr. Obrinsky added.

"I think the change isn't all that Significant," said Robert R. Davis, director of economics and research at the Savings and Community Bankers of America. Meanwhile, the finance board also reported that mortgage bankers made progress in cracking the ARM market, which is usually dominated by thrifts.

Thirty-two percent of all loans made by mortgage bankers in July carried adjustable rates, up five points from the June level.

Seventy percent of loans made by thrifts in July were ARMs, down a point since June.

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