US Mortgage Rates Drop as Concerns Over Softening Housing Market Rise

Location: McLean
Author: Eileen Fitzpatrick
Date: Friday, July 27, 2007
 

Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) yesterday in which the 30-year fixed-rate mortgage (FRM) averaged 6.69 percent with an average 0.4 point for the week ending July 26, down from last week when it averaged 6.73.  Last year at this time, the 30-year FRM averaged 6.72 percent.

The 15-year FRM this week averaged 6.37 percent with an average 0.4 point, down slightly from last week when it averaged 6.38 percent.  A year ago, the 15-year FRM averaged 6.34 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.30 percent this week, with an average 0.4 point, down from last week when it averaged 6.35 percent.  A year ago, the 5-year ARM averaged 6.35 percent. 

One-year Treasury-indexed ARMs averaged 5.69 percent this week with an average 0.5 point, down from last week when it averaged 5.72 percent.  At this time last year, the 1-year ARM averaged 5.78 percent. (Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mortgage rates eased this week on market concerns that a further weakening of housing demand this spring will delay any recovery in the sector,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “For example, building permits fell last month to the slowest pace in a decade, and more recent data on June sales of existing home showed a fourth consecutive monthly decline.

“Several factors contributed to the softening in housing markets this spring. In addition to the tightening of lending standards earlier this year, especially on subprime loans, the 40 basis point jump in rates on 30-year fixed-rate mortgages in June may have deterred potential buyers. For the year-to-date, sales of single-family homes were down about 9 percent from the first half of 2007.”

SUMMARY OF SURVEY RESULTS

Fixed-Rate Mortgages
  Average Conventional 30-Year Commitment Rate Fees & Points Average Conventional 15-Year Commitment Rate Fees & Points
US 6.69 0.4 6.37 0.4
Northeast 6.74 0.1 6.38 0.1
Southeast 6.65 0.4 6.36 0.4
North Central 6.72 0.3 6.38 0.3
Southwest 6.72 0.2 6.42 0.2
West 6.67 0.6 6.34 0.6

 

Adjustable–Rate Mortgages
  5/1 ARM Commitment Rate Fees & Points
Margin
 1 Year ARM Commitment Rate Fees & Points Margin
US 6.30 0.4 2.76 5.69 0.5 2.75
Northeast 6.22 0.3 2.78 5.60 0.4 2.75
Southeast 6.30 0.5 2.75 5.65 0.8 2.75
North Central 6.47 0.3 2.75 5.86 0.2 2.75
Southwest 6.39 0.3 2.76 5.98 0.3 2.80
West 6.24 0.6 2.75 5.60 0.5 2.72
             
 

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 RESULT

30-YEAR FIXED RATE MORTGAGES

 
 

US

NE

SE

NC

SW

W
AVERAGE

6.69

6.74

6.65

6.72

6.72

6.67
Fees & Points

0.4

0.1

0.4

0.3

0.2

0.6

15-YEAR FIXED RATE MORTGAGES

 
 

US

NE

SE

NC

SW

W
AVERAGE

6.37

6.38

6.36

6.38

6.42

6.34
Fees & Points

0.4

0.1

0.4

0.3

0.2

0.6

                               5/1 ADJUSTABLE RATE MORTGAGES (ARMs)

 
 

US

NE

SE

NC

SW

W
AVERAGE

6.30

6.22

6.30

6.47

6.39

6.24
Fees & Points

0.4

0.3

0.5

0.3

0.3

0.6

                              1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

 
 

US

NE

SE

NC

SW

W
AVERAGE

5.69

5.60

5.65

5.86

5.98

5.60
Fees & Points

0.5

0.4

0.8

0.2

0.3

0.5

THE NATIONAL MORTGAGE RATE SNAPSHOT

 

 

 One Year Ago

 

30-YR FRM

15-YR FRM

5/1 ARM

1-YR ARM
AVERAGE

6.72

6.34

6.35

5.78
Fees & Points

0.3

0.4

0.4

0.7

 

 

 

 One Week Ago

 

30-YR FRM

15-YR FRM

5/1 ARM

1-YR ARM
AVERAGE

6.73

6.38

6.35

5.72
Fees & Points

0.4

0.4

0.5

0.5

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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