The only mortgage product in the survey not to fall from last week's average was the 15-year fixed-rate mortgage; it averaged 5.60%, unchanged from last week. The mortgage averaged 5.87% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.57% this week, down from 5.67% last week. The ARM averaged 5.89% a year ago. And 1-year Treasury-indexed ARMs averaged 5.18% this week, down from last week's 5.29% average. The ARM averaged 5.48% a year ago.

To obtain the rates, the 30-year fixed rate mortgage and the 5-year ARM required payment of an average 0.6 point. The 15-year fixed-rate mortgage required an average 0.5 point and the 1-year ARM required an average 0.7 point. A point is 1% of the mortgage amount, charged as prepaid interest.

In his written comments, Frank Nothaft, Freddie Mac chief economist, pointed to two statements made on Tuesday that seemed to bolster optimism about the financial markets -- and affect mortgage rates.

"Fed Chairman Bernanke indicated in a speech on May 13 that the Fed stands ready to continue to add liquidity to the markets," Nothaft said in a news release. "On the same day, San Francisco Fed bank president Janet Yellen added that she anticipates inflation will slow as commodity prices level off in the second half of the year."

New positive numbers on the overall state of the economy -- despite a bleak housing market -- also provided some optimism, he added.

"Retail sales (excluding automobiles) rose 0.5% in April, over twice that of market forecasts, and there was a significant upward revision in March's figures as well. Also, the consumer price index for April rose less than expected, allaying some market concerns of inflation taking hold," he said.

In a separate survey released on Wednesday, the Mortgage Bankers Association reported that mortgage application filings rose a seasonally adjusted 2.9% last week, compared with the previous week.