Long and Short-Term US Mortgage Rates Fall as Inflation Rises

The average for the 15-year FRM this week is 6.27 percent, with an average 0.3 point, down from last week’s average of 6.34 percent.  A year ago, the 15-year FRM averaged 5.38 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.27 percent this week, with an average 0.4 point, down from last week when it averaged 6.35 percent.  A year ago, the five-year ARM averaged 5.30 percent. 

One-year Treasury-indexed ARMs averaged 5.69 percent this week, with an average 0.7 point, down from last week when it averaged 5.78 percent.  At this time last year, the one-year ARM averaged 4.47 percent. 

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

“Second quarter Gross Domestic Product (GDP) came in weaker than the market had expected.  This means inflation is less of a threat, and that translates into lower mortgage rates,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “Although lower rates are a welcome sight, we still feel that the 30-year fixed-rate mortgage rate will drift up and down somewhat over the next few months, but will average less than seven percent for the year.”

 

• 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 –is the 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 Primary Mortgage Market Survey 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.