Long and Short-Term US Mortgage Rates Make Up Last Week’s Drop
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, July 21, 2006
Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.80 percent, with an average 0.5 point, for the week ending July 20, 2006, up from last week’s average of 6.74 percent. Last year at this time, the 30-year FRM averaged 5.73 percent. The last time the 30-year FRM was higher was the week ending May 24, 2002, when it averaged 6.81 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.36 percent this week, with an average 0.5 point, up from last week when it averaged 6.33 percent. A year ago, the five-year ARM averaged 5.26 percent.
One-year Treasury-indexed ARMs averaged 5.80 percent this week, with an average 0.6 point, up from last week when it averaged 5.75 percent. At this time last year, the one-year ARM averaged 4.42 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Financial markets were a bit jittery after core Consumer Price Index (CPI) figures for June were released that indicated inflation might still be a potential threat,” said Frank Nothaft, Freddie Mac vice president and chief economist. “If this were the case, the Fed would be more inclined to continue to raise rates this year. Mortgage rates reflected that thinking and rose accordingly.
“However, Fed Chief Bernanke, in his semi-annual speech to Congress, hinted that another rise in overnight lending rates might not be imminent and financial markets breathed a collective sigh of relief, which should be reflected in the results of next week’s survey.”
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SUMMARY OF SURVEY RESULTS |
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|
Fixed-Rate Mortgages |
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| Average Conventional 30-Year Commitment Rate | Fees & Points | Average Conventional 15-Year Commitment Rate | Fees & Points | |
| US | 6.80 | 0.5 | 6.41 | 0.4 |
| Northeast | 6.83 | 0.3 | 6.44 | 0.3 |
| Southeast | 6.73 | 0.6 | 6.32 | 0.6 |
| North Central | 6.88 | 0.2 | 6.53 | 0.2 |
| Southwest | 6.79 | 0.4 | 6.39 | 0.4 |
| West | 6.76 | 0.8 | 6.38 | 0.6 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points | Margin | 1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 6.36 | 0.6 | 2.75 | 5.80 | 0.7 | 2.75 |
| Northeast | 6.29 | 0.4 | 2.77 | 5.81 | 0.4 | 2.76 |
| Southeast | 6.36 | 0.7 | 2.75 | 5.78 | 0.8 | 2.75 |
| North Central | 6.54 | 0.4 | 2.75 | 5.79 | 0.8 | 2.75 |
| Southwest | 6.32 | 0.6 | 2.77 | 6.07 | 0.6 | 2.79 |
| West | 6.34 | 0.7 | 2.74 | 5.70 | 1.0 | 2.73 |
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 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.
|
Freddie Mac Region |
PMMS Weights |
|
Northeast |
24.6 |
|
Southeast |
16.5 |
|
North Central |
17.1 |
|
Southwest |
11.2 |
|
West |
30.7 |
PRIMARY MORTGAGE MARKET SURVEY RESULTS
30-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.80 |
6.83 |
6.73 |
6.88 |
6.79 |
6.76 |
| Fees & Points |
0.5 |
0.3 |
0.6 |
0.2 |
0.4 |
0.8 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.41 |
6.44 |
6.32 |
6.53 |
6.39 |
6.38 |
| Fees & Points |
0.4 |
0.3 |
0.6 |
0.2 |
0.4 |
0.6 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.36 |
6.29 |
6.36 |
6.54 |
6.32 |
6.34 |
| Fees & Points |
0.6 |
0.4 |
0.7 |
0.4 |
0.6 |
0.7 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.80 |
5.81 |
5.78 |
5.79 |
6.07 |
5.70 |
| Fees & Points |
0.7 |
0.4 |
0.8 |
0.8 |
0.6 |
1.0 |
THE NATIONAL MORTGAGE RATE SNAPSHOT
|
|
||||
|
|
One Year Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
5.73 |
5.32 |
5.26 |
4.42 |
| Fees & Points |
0.4 |
0.4 |
0.5 |
0.6 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.74 |
6.37 |
6.33 |
5.75 |
| Fees & Points |
0.6 |
0.4 |
0.5 |
0.6 |
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.