Mortgage Rates Plunge, Freddie Mac Reports
Friday, September 12, 2008
In the company's first news released since it was taken over by the federal government, Freddie Mac continued “business as usual,” reporting the results of its weekly Primary Mortgage Market Survey (PMMS) today, in which it showed mortgage rates dropped significantly for the week ending September 11, 2008.
The 30-year fixed-rate mortgage (FRM) averaged 5.93 percent, down from last week when it averaged 6.35 percent. Last year at this time, the 30-year FRM averaged 6.31 percent.
“Interest rates for 30-year fixed-rate mortgages are down almost 0.6 percentage points over the past 4 weeks, which will help to spur home purchases and loan refinancing in coming weeks,” said Frank Nothaft, Freddie Mac's VP and chief economist. “This means that the monthly principal and interest payment on a new $200,000 loan is over $76 lower than a month ago,” Nothaft explained.
The 15-year FRM this week averaged 5.54 percent, down from 5.90 percent last week. A year ago at this time, the 15-year FRM averaged 5.97 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.87 percent this week. Last week, it averaged 5.97 percent. A year ago, the 5-year ARM averaged 6.17 percent.
One-year Treasury-indexed ARMs were the only class of loans measured that showed a weekly increase, but the average rate was nearly a half a point below last year. One-year ARMs averaged 5.21 percent this week, up from last week when it averaged 5.15 percent. At this time last year, the 1-year ARM averaged 5.66 percent.
According to Nothaft, “Lower rates have occurred at an opportune time, as the July pending sales data from the National Association of Realtors were off 3.2 percent from June. The Mortgage Bankers Association reported that refinance applications are up 18 percent over the past 3 weeks through September 5th, indicating that refinance activity has already begun to pick up,” Nothaft added.
Fees and points for FRMs and 5-year ARMs averaged 0.7 for the week ending September 11, 2008. One-year ARMs averaged 0.6. Fees and points are reported along with the average rates to accurately reflect the total cost of obtaining a mortgage.
To view a summary of Freddie Mac's survey results, including average rates by region, click here.
The 30-year fixed-rate mortgage (FRM) averaged 5.93 percent, down from last week when it averaged 6.35 percent. Last year at this time, the 30-year FRM averaged 6.31 percent.
“Interest rates for 30-year fixed-rate mortgages are down almost 0.6 percentage points over the past 4 weeks, which will help to spur home purchases and loan refinancing in coming weeks,” said Frank Nothaft, Freddie Mac's VP and chief economist. “This means that the monthly principal and interest payment on a new $200,000 loan is over $76 lower than a month ago,” Nothaft explained.
The 15-year FRM this week averaged 5.54 percent, down from 5.90 percent last week. A year ago at this time, the 15-year FRM averaged 5.97 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.87 percent this week. Last week, it averaged 5.97 percent. A year ago, the 5-year ARM averaged 6.17 percent.
One-year Treasury-indexed ARMs were the only class of loans measured that showed a weekly increase, but the average rate was nearly a half a point below last year. One-year ARMs averaged 5.21 percent this week, up from last week when it averaged 5.15 percent. At this time last year, the 1-year ARM averaged 5.66 percent.
According to Nothaft, “Lower rates have occurred at an opportune time, as the July pending sales data from the National Association of Realtors were off 3.2 percent from June. The Mortgage Bankers Association reported that refinance applications are up 18 percent over the past 3 weeks through September 5th, indicating that refinance activity has already begun to pick up,” Nothaft added.
Fees and points for FRMs and 5-year ARMs averaged 0.7 for the week ending September 11, 2008. One-year ARMs averaged 0.6. Fees and points are reported along with the average rates to accurately reflect the total cost of obtaining a mortgage.
To view a summary of Freddie Mac's survey results, including average rates by region, click here.
