Mortgage Rates in US Fluctuating

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Uncertainty over the Federal Reserve's bond buy-back program has mortgage rates in the U.S. on a roller coaster.

The interest rate for a 30-year fixed mortgage dropped to 4.51 percent for the week ending August 29, 2013, compared to an average of 4.58 percent last week, Freddie Mac reported. The 30-year averaged fixed rate stood at 3.59 percent a year ago.

In recent weeks mortgage rates have been going up and down, as the industry attempted to determine the Fed's policy toward tapering bond purchases.

"The Fed is monitoring the housing market closely after the run up in mortgage rates over the past few months," Freddie Mac chief economist Frank Nothaft said in the report. "The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week."

The 15-year fixed mortgage rate averaged 3.54 percent with an average 0.7 point, down from last week's 3.60 percent average. A year ago at this time, the 15-year FRM averaged 2.86 percent. The 1-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.4 point, up from last week when it averaged 2.67 percent. At this time last year, the 1-year ARM averaged 2.63 percent.