Average rates for both fixed-rate and adjustable-rate mortgages dropped significantly this week, according to the latest report from Freddie Mac.

It its Primary Mortgage Market Survey published yesterday, Freddie Mac noted average mortgage rate decreases for 30-year fixed-rate mortgages, 15-year fixed mortgages, and both 5-year adjustable rate mortgages (ARMs) and 1-year ARMs.

“Low inflation is keeping mortgage rates at bay,” Frank Nothaft, vice president and chief economist, Freddie Mac, said.

For the week ending April 21, 2011, 30-year fixed-rate mortgages had an average rate of 4.80 percent, which is a decrease from 4.91 percent last week and 4.87 percent two weeks prior.

The average rates for 15-year fixed mortgages came in at 4.02 percent, down from 4.13 percent the previous week. Both 15-year and 30-year fixed mortgages had an average 0.7 point, according to Freddie Mac.

Average rates for 5-year ARMs dropped to 3.61 percent, which is down from 3.78 percent last week and 4.03 percent one year ago. The latest Freddie Mac survey also noted that 1-year ARMs averaged 3.16 percent this week, down from 3.25 percent last week and 4.03 percent last year at this time.

But the question remains: Are low mortgage rates translating into a stronger housing market?

“The housing market continues to struggle. Although housing starts and existing home sales in March were stronger than the market consensus, they were still at low levels,” Nothaft said.

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