Not Much Change Seen in US Mortgage Rates During the Holidays Season

Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.13 percent with an average 0.4 point for the week ending December 21, 2006, up slightly from last week when it averaged 6.12 percent.  Last year at this time, the 30-year FRM averaged 6.26 percent. 

The 15-year FRM this week averaged 5.89 percent with an average 0.4 point, up from last week when it averaged 5.86 percent.  A year ago, the 15-year FRM averaged 5.79 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.96 percent this week, with an average 0.5 point, up from last week when it averaged 5.92 percent.  A year ago, the five-year ARM averaged 5.82 percent. 

One-year Treasury-indexed ARMs averaged 5.44 percent this week with an average 0.6 point, down slightly from last week when it averaged 5.45 percent.  At this time last year, the one-year ARM averaged 5.22 percent. 

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

“A quiet week for financial markets translated into a quiet week for mortgage rates as well,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “This isn’t much of a surprise, as traditionally the December holiday season tends to be rather slow for housing. 

“What is interesting to note is that the 30-year FRM this week is 1/8 of a percentage point lower than the 30-year FRM was at this time last year.  This could bode well for housing in the new year, and indeed we have seen a spike in refinancing activity over the past few weeks as rates have come down.  Borrowers who have ARMs that are scheduled for a rate adjustment in 2007 may want to consider refinancing those loans now to take advantage of the lower rates currently available.”

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 –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 October 26, 2006.  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 2005.  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

Freddie Mac's Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS.  Freddie Mac may change the methodology used to conduct the PMMS survey at any time and without notice.

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