Strong March Employment Report Pushes US Mortgage Rates Upward
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, April 13, 2007
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.93 percent this week, with an average 0.5 point, up slightly from last week when it averaged 5.92 percent. A year ago, the 5-year ARM averaged 6.13 percent.
One-year Treasury-indexed ARMs averaged 5.47 percent this week with an average 0.5 point, up from last week when it averaged 5.44 percent. At this time last year, the 1-year ARM averaged 5.61 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Interest rates in general ticked up following the release of the March employment data, which showed stronger job growth than what the market expected" said Frank Nothaft, Freddie Mac vice president and chief economist. "This brought interest rates on 30-year fixed-rate mortgages (FRMs) back up this week to match the first quarter average.
"Mortgage refinancing still remains strong. The 30-year FRM rate has remained below 6-1/2 percent since mid August 2006, which helps explain why the share of total mortgage applications for refinance has remained above 40 percent sincelast August. Among those borrowers who are choosing to refinance now, a large share are doing so to avoid an adjustment to their monthly payment as the initial period on their adjustable-rate loan expires or to extract equity through a cash-out refi. In the fourth quarter of 2006, 84 percent of borrowers who refinanced their prime conventional loans increased their loan balance by more than 5 percent, totaling more than $70 billion in equity extracted. We expect a similar numbers for the first quarter of this year."
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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 | 6.22 | 0.4 | 5.90 | 0.4 |
| Northeast | 6.27 | 0.1 | 5.96 | 0.2 |
| Southeast | 6.17 | 0.4 | 5.86 | 0.4 |
| North Central | 6.27 | 0.2 | 5.97 | 0.3 |
| Southwest | 6.22 | 0.4 | 5.90 | 0.4 |
| West | 6.18 | 0.6 | 5.86 | 0.7 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points |
Margin |
1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 5.93 | 0.5 | 2.77 | 5.47 | 0.5 | 2.75 |
| Northeast | 5.92 | 0.3 | 2.80 | 5.50 | 0.4 | 2.75 |
| Southeast | 5.93 | 0.6 | 2.76 | 5.50 | 0.5 | 2.76 |
| North Central | 6.03 | 0.3 | 2.78 | 5.50 | 0.4 | 2.74 |
| Southwest | 5.93 | 0.6 | 2.78 | 5.53 | 0.6 | 2.82 |
| West | 5.90 | 0.7 | 2.74 | 5.40 | 0.7 | 2.74 |
Freddie Mac defines its regions as
follows:
Northeast: NY, NJ,
PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI, CT
Southeast: NC, SC,
TN, KY, GA, AL, FL, MS, PR, VI
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.
|
Freddie Mac Region |
PMMS Weights |
|
Northeast |
24.5 |
|
Southeast |
18.6 |
|
North Central |
15.4 |
|
Southwest |
10.4 |
|
West |
31.0 |
PRIMARY MORTGAGE MARKET SURVEY RESULTS
30-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.22 |
6.27 |
6.17 |
6.27 |
6.22 |
6.18 |
| Fees & Points |
0.4 |
0.1 |
0.4 |
0.2 |
0.4 |
0.6 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.90 |
5.96 |
5.86 |
5.97 |
5.90 |
5.86 |
| Fees & Points |
0.4 |
0.2 |
0.4 |
0.3 |
0.4 |
0.7 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.93 |
5.92 |
5.93 |
6.09 |
5.93 |
5.90 |
| Fees & Points |
0.5 |
0.3 |
0.6 |
0.3 |
0.6 |
0.7 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.47 |
5.50 |
5.50 |
5.50 |
5.53 |
5.40 |
| Fees & Points |
0.5 |
0.4 |
0.5 |
0.4 |
0.6 |
0.7 |
THE NATIONAL MORTGAGE RATE SNAPSHOT
|
|
||||
|
|
One Year Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.49 |
6.14 |
6.13 |
5.61 |
| Fees & Points |
0.6 |
0.5 |
0.7 |
0.8 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.17 |
5.87 |
5.92 |
5.44 |
| Fees & Points |
0.4 |
0.5 |
0.6 |
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.
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