During the past few weeks, the mortgage market has shown a lot of instability. There has been a lot of fluctuation in the mortgage rates for quite some time. This week the rates of 30-year fixed mortgages dropped to the lowest point in last four months, this drop has given some relief to the people who are planning to refinance their mortgage loan.

Freddie Mac, reported that the 30-year fixed-rate mortgages averaged 6.31 percent this week, the lowest level since May 17, when 30-year mortgages averaged 6.21 percent. Last week the rate of 30-year fixed rate mortgage was 6.46 percent.

The Freddie Mac survey shows that all the mortgage rates has fallen this week. Frank Nothaft, the chief economist of Freddie Mac, said this should provide some help to homeowners who are hoping to refinance existing adjustable rate loans that are resetting from low introductory 'teaser' rates.

It is estimated that around 2 million such loans will be reset during the period of next 18 months. This has raised worries regarding a signal of delinquencies, as homeowners are unable to meet the new payments. President's Top administration officials met with major mortgage servicing companies on Wednesday to advise them to extend as much help as possible to homeowners trying to avoid default by refinancing into new mortgages that they can manage to pay.

Most of the economists consider that the Federal Reserve at its meeting next Tuesday will make a decision to cut a key interest rate in an effort to protect the economy from recent disorder in housing and financial markets.

The rates of 15-year fixed-rate mortgages, a highly chosen option for refinancing, averaged 5.97 percent this week, down from 6.15 percent last week.

The rates on 5-year adjustable rate mortgages down by 0.15 percent, fell from 6.32 percent and averaged 6.17 percent, where as the 1-year adjustable rate mortgage dropped to 5.66 percent, compared to 5.74 percent during the last week.

The mortgage rates do not include add-on fees that are usually known as points. Thirty-year mortgages had a nationwide average fee of 0.5 point while 15-year mortgages had an average fee of 0.4 point. 5-year adjustable rate mortgage had an average fee of 0.6 point and 1-year adjustable rate mortgage had an average fee of 0.8 point.

During last year at this same time, rates on the various mortgage types were all higher. 30-year fixed mortgages stood at 6.43 percent this time last year, 15-year fixed mortgages were at 6.11 percent, 5-year adjustable rate mortgages averaged 6.10 percent and 1-year adjustable rate mortgages were at 5.60 percent.

After a five-year boom, sales of both the new and existing homes fell sharply last year. The whole thing has become poorer this year, as lenders have suddenly tightened standards amid, increasing the rate of foreclosures and late payments. All these problems started in the market because of the sub prime loans, which are accessible to borrowers with weak credit histories, but have now spread to all the other loan categories.