US fixed mortgage rates drop

US fixed mortgage rates edged down to a two-month low after the Federal Reserve decided to keep its bond buying program in place, according to the Primary Mortgage Market Survey released Thursday.

The US Fed said the 30-year fixed-rate mortgage (FRM) dropped from 4.50 to 4.32 percent, the lowest since late July, in the week ending Sep 26, Xinhua reported.

The 15-year FRM declined to 3.37 percent this week from 3.54 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) decreased to 3.07 percent, and the one-year Treasury-indexed ARM fell to 2.63 percent.

"Mortgage rates fell following the Federal Reserve announcement that it will maintain its bond buying stimulus. These low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated," said Frank Nothaft, Freddie Mac's vice president and chief economist.

Mortgage rates climbed to a two-year high last month from a near-record low in early May on the speculation that the Fed could scale back its bond purchases as soon as September.

However, the US Fed last week unexpectedly decided to keep its bond buying program unchanged as more evidence were needed to confirm sustainable recovery in the US economy before adjusting the pace of bond purchases.