Mortgage rates declined the week that ended Thursday after a month of gains, with the average 30-year fixed rate retreating closer to 5%, according to Freddie Mac's weekly survey.

Current rates on fixed-rate mortgages are just about at their average levels for 2009, while adjustable-rate loans are considerably lower. Freddie's chief economist, Frank Nothaft, said Thursday he expects that to change.

"As the economy strengthens further and the Federal Reserve decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates," he said.

The 30-year fixed-rate mortgage averaged 5.09% for the week that ended Thursday, down from the previous week's 5.14% average but up from 5.01% a year ago. Rates on 15-year fixed-rate mortgages were 4.5%, down from 4.54% and 4.62%, respectively.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.44%, flat with the previous week and down from 5.49% a year earlier. One-year Treasury-indexed ARMs were 4.31%, down from 4.33% and 4.95%, respectively.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the adjustable-rate mortgages required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

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