US Long-Term Mortgage Rates Highest In Nearly Four Years

Freddie Mac last week released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.49 percent, with an average 0.6 point, for the week ending April 13, 2006, up from last week’s average of 6.43 percent.  Last year at this time, the 30-year FRM averaged 5.91 percent.  The 30-year FRM has not been higher since the week ending July 12, 2002, when it averaged 6.54 percent.

The average for the 15-year FRM this week is 6.14 percent, with an average 0.5 point, up from last week’s average of 6.10 percent.  A year ago, the 15-year FRM averaged 5.46 percent.  The 15-year FRM has not been higher since the week ending June 13, 2002, when it averaged 6.17 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.13 percent this week, with an average 0.7 point, up from last week when it averaged 6.11 percent.  A year ago, the five-year ARM averaged 5.31 percent. 

One-year Treasury-indexed ARMs averaged 5.61 percent this week, with an average 0.8 point, up from last week when it averaged 5.57 percent.  At this time last year, the one-year ARM averaged 4.30 percent. 

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mortgage rates continued to creep up following the unexpected drop in March’s unemployment rate.  That drop indicated there may be some upward pressure on wages in the near future, which could lead to a rise in inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “And the threat of a higher rate of inflation, as we all know, invariably leads to higher mortgage rates.

“With that said, Freddie Mac’s outlook for 30-year mortgage rates for 2006 continues to expect that rates will fluctuate somewhere between 6.25 percent 6.75 percent over the course of the year.”

Freddie Mac defines its regions as follows:
Northeast:  NY, NJ, PA, DE, MD, DC, VA, WV, PR, ME, NH, VT, MA, RI, CT, VI
Southeast:  NC, SC, TN, KY, GA, AL, FL, MS
North Central:  OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest:  TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West:  CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU   

DEFINITIONS
Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender.  This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.
ARM Index - One-year Treasury
Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.
Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.
Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.
Weighted Averages for the PMMS have been adjusted as of September 22, 2005. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under the Home Mortgage Disclosure Act (HMDA) for 2004.  The weights are listed in the table below.

PRIMARY MORTGAGE MARKET SURVEY RESULTS

30-YEAR FIXED RATE MORTGAGES

15-YEAR FIXED RATE MORTGAGES

5/1 ADJUSTABLE RATE MORTGAGES (ARMs)

1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

THE NATIONAL MORTGAGE RATE SNAPSHOT