Mortgage Rates Reach 10 Month Highs
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, June 8, 2007
Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.53 percent with an average 0.4 point for the week ending June 7, 2007, up from last week when it averaged 6.42 percent. Last year at this time, the 30-year FRM averaged 6.62 percent. The 30-year FRM has not been higher since the week ending August 10, 2006, when it averaged 6.55 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.24 percent this week, with an average 0.6 point, up from last week when it averaged 6.19 percent. A year ago, theMortgage Rates Reach 10 Month Highs 5-year ARM averaged 6.20 percent. The 5-year ARM has not been higher since the week ending August 3, 2006, when it averaged 6.27 percent.
One-year Treasury-indexed ARMs averaged 5.65 percent this week with an average 0.7 point, up from last week when it averaged 5.57 percent. At this time last year, the 1-year ARM averaged 5.63 percent. The 1-year ARM has not been higher since the week ending August 10, 2006, when it averaged 5.69 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Mortgage rates climbed this week owing to market concerns of a tight labor force and wage growth. May’s unemployment rate remained at the second lowest level since May 2001 while average hourly earnings rose,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Additionally, unit labor costs increased 1.8 percent over the first three months of the year, tripling the original estimate, and fueling inflation fears.
“Meanwhile, Freddie Mac released a new purchase-transaction only version of its Conventional Mortgage Home Price Index this week which showed a sharp deceleration in house-price appreciation in the first quarter of 2007. As house prices grow less quickly and household incomes rise, the housing market will likely recover from its current slump, but perhaps not before the end 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 | 6.53 | 0.4 | 6.22 | 0.4 |
| Northeast | 6.54 | 0.2 | 6.25 | 0.2 |
| Southeast | 6.52 | 0.5 | 6.21 | 0.6 |
| North Central | 6.54 | 0.3 | 6.23 | 0.3 |
| Southwest | 6.54 | 0.3 | 6.25 | 0.4 |
| West | 6.51 | 0.6 | 6.19 | 0.6 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points | Margin | 1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 6.24 | 0.6 | 2.76 | 5.65 | 0.7 | 2.77 |
| Northeast | 6.24 | 0.4 | 2.76 | 5.72 | 0.6 | 2.75 |
| Southeast | 6.19 | 0.6 | 2.76 | 5.59 | 0.8 | 2.76 |
| North Central | 6.34 | 0.4 | 2.76 | 5.59 | 0.4 | 2.75 |
| Southwest | 6.29 | 0.5 | 2.78 | 5.68 | 0.7 | 2.82 |
| West | 6.21 | 0.7 | 2.76 | 5.65 | 0.8 | 2.77 |
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 |
6.53 |
6.54 |
6.52 |
6.54 |
6.54 |
6.51 |
| Fees & Points |
0.4 |
0.2 |
0.5 |
0.3 |
0.3 |
0.6 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.22 |
6.25 |
6.21 |
6.23 |
6.25 |
6.19 |
| Fees & Points |
0.4 |
0.2 |
0.6 |
0.3 |
0.4 |
0.6 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.24 |
6.24 |
6.19 |
6.34 |
6.29 |
6.21 |
| Fees & Points |
0.6 |
0.4 |
0.6 |
0.4 |
0.5 |
0.7 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.65 |
5.72 |
5.59 |
5.59 |
5.68 |
5.65 |
| Fees & Points |
0.7 |
0.6 |
0.8 |
0.4 |
0.7 |
0.8 |
THE NATIONAL MORTGAGE RATE SNAPSHOT
|
|
||||
|
|
One Year Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.62 |
6.23 |
6.20 |
5.63 |
| Fees & Points |
0.5 |
0.5 |
0.5 |
0.8 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.42 |
6.12 |
6.19 |
5.57 |
| Fees & Points |
0.4 |
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.
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