Martin Crutsinger, THE ASSOCIATED PRESS

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WASHINGTON - Rates on 30-year mortgages in the United States fell for a third straight week, dropping to the lowest level since mid-July.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages dipped to 6.35 per cent this week, down from 6.40 per cent, the previous week. It marked the third consecutive decline and left rates at the lowest level since July 17 when they stood at 6.26 per cent.

The 30-year mortgage, which hit a high for this year at 6.63 per cent on July 24, has been above six per cent since late May as financial markets have become convinced that rising inflation pressures will keep the Federal Reserve from cutting interest rates further to bolster the weak economy.

Frank Nothaft, chief economist for Freddie Mac, attributed this week's decline in mortgage rates to recent reports indicating that consumer spending may slow further now that the boost from the economic stimulus payments is fading.

Nothaft noted that personal incomes, the fuel needed to support consumer spending, dipped by 0.7 per cent in July, the worst showing in three years and a worrisome signal that spending could falter in the months ahead.

The Freddie Mac survey showed other mortgage rates also declined this week.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, fell to 5.90 per cent, down from 5.93 per cent last week.

Rates on five-year, adjustable-rate mortgages averaged 5.97 per cent this week, down from 6.03 per cent last week.

One-year, adjustable-rate mortgages dropped to 5.15 per cent, down from 5.33 per cent last week.

The mortgage rates do not include add-on fees known as points. The nationwide fee for 30-year mortgages averaged 0.7 point last week. The nationwide fee for all other mortgage types averaged 0.6 point this week.

A year ago, rates on 30-year mortgages stood at 6.46 per cent, 15-year mortgage rates averaged 6.15 per cent, five-year adjustable-rate mortgages were at 6.32 per cent and one-year adjustable-rate mortgages stood at 5.74 per cent.