Conflicting Information Keeps US Mortgage Rates Low
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, March 30, 2007
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.88 percent this week, with an average 0.5 point, down from last week when it averaged 5.91 percent. A year ago, the 5-year ARM averaged 6.02 percent.
One-year Treasury-indexed ARMs averaged 5.43 percent this week with an average 0.6 point, up from last week when it averaged 5.40 percent. At this time last year, the 1-year ARM averaged 5.51 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Recent data releases sent conflicting signals about the direction of the housing market,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The rise in existing home sales in February to a 6.69 million unit pace, the highest level since last April, offered some hope of firming in housing demand. In contrast, February’s new home sales fell unexpectedly to 848,000 units, the slowest pace since June 2000, suggesting that more time will be needed before a housing recovery takes place.
“Despite
concerns about possible spillovers from the troubles in the subprime
market, rates on 30-year fixed-rate mortgages remained stable. The
ample liquidity provided by Freddie Mac in the conventional conforming
mortgage market has helped keep rates down, supporting affordability and
aiding in the ultimate recovery of the housing market."
|
SUMMARY OF SURVEY RESULTS |
||||
|
Fixed-Rate Mortgages |
||||
| Average Conventional 30-Year Commitment Rate | Fees & Points | Average Conventional 15-Year Commitment Rate | Fees & Points | |
| US | 6.16 | 0.4 | 5.86 | 0.4 |
| Northeast | 6.21 | 0.1 | 5.91 | 0.1 |
| Southeast | 6.11 | 0.5 | 5.81 | 0.6 |
| North Central | 6.20 | 0.2 | 5.87 | 0.2 |
| Southwest | 6.13 | 0.5 | 5.84 | 0.5 |
| West | 6.14 | 0.7 | 5.84 | 0.7 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points |
Margin |
1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 5.88 | 0.5 | 2.77 | 5.43 | 0.6 | 2.76 |
| Northeast | 5.91 | 0.2 | 2.78 | 5.46 | 0.4 | 2.75 |
| Southeast | 5.86 | 0.6 | 2.76 | 5.44 | 0.9 | 2.77 |
| North Central | 5.93 | 0.2 | 2.76 | 5.48 | 0.3 | 2.74 |
| Southwest | 5.85 | 0.6 | 2.78 | 5.42 | 0.6 | 2.83 |
| West | 5.86 | 0.7 | 2.76 | 5.39 | 0.7 | 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 |
6.16 |
6.21 |
6.11 |
6.20 |
6.13 |
6.14 |
| Fees & Points |
0.4 |
0.1 |
0.5 |
0.2 |
0.5 |
0.7 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.86 |
5.91 |
5.81 |
5.87 |
5.84 |
5.84 |
| Fees & Points |
0.4 |
0.1 |
0.6 |
0.2 |
0.5 |
0.7 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.88 |
5.91 |
5.86 |
5.93 |
5.85 |
5.86 |
| Fees & Points |
0.5 |
0.2 |
0.6 |
0.2 |
0.6 |
0.7 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.43 |
5.46 |
5.44 |
5.48 |
5.42 |
5.39 |
| Fees & Points |
0.6 |
0.4 |
0.9 |
0.3 |
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 |
6.35 |
6.00 |
6.02 |
5.51 |
| Fees & Points |
0.5 |
0.5 |
0.6 |
0.8 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.16 |
5.90 |
5.91 |
5.40 |
| Fees & Points |
0.4 |
0.4 |
0.6 |
0.7 |
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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