Mortgage Rates Edge Up on Fed Inflation Jitters
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, May 18, 2007
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.92 percent this week, with an average 0.6 point, up from last week when it averaged 5.89 percent. A year ago, the 5-year ARM averaged 6.23 percent.
One-year Treasury-indexed ARMs averaged 5.48 percent this week with an average 0.7 point, unchanged from last week when it averaged 5.48 percent. At this time last year, the 1-year ARM averaged 5.62 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Mortgage rates inched up this week following the Federal Open Market Committee statement reiterating that the predominant concern remains the risk that inflation will fail to moderate as expected,” said Frank Nothaft, vice president and chief economist. “However, as long as core inflation continues to trend downward and economic growth remains sub-par it is unlikely that we will see any big movement in mortgage rates.
“Recent indicators point to continued
weakness in the housing market, with the bottom of the cycle still
months away. There are signs that house sales are stabilizing and
excess inventories beginning to come under control, but building permits
continue to be weak and condo sales are soft in a number of markets. On
a bright note, existing home sales in the first quarter were up 2.4
percent over the fourth quarter of 2006, according to the National
Association of Realtors. And the average pace of mortgage applications
for home purchase over the first two weeks in May was the strongest
since January 2006, according the Mortgage Bankers Association.”
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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 | 6.21 | 0.4 | 5.92 | 0.4 |
| Northeast | 6.24 | 0.2 | 5.98 | 0.2 |
| Southeast | 6.16 | 0.6 | 5.86 | 0.6 |
| North Central | 6.26 | 0.2 | 5.98 | 0.2 |
| Southwest | 6.19 | 0.4 | 5.92 | 0.4 |
| West | 6.21 | 0.5 | 5.90 | 0.6 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points | Margin | 1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 5.92 | 0.5 | 2.77 | 5.48 | 0.7 | 2.76 |
| Northeast | 5.93 | 0.3 | 2.78 | 5.54 | 0.6 | 2.75 |
| Southeast | 5.89 | 0.7 | 2.76 | 5.42 | 0.9 | 2.76 |
| North Central | 5.98 | 0.3 | 2.77 | 5.35 | 0.5 | 2.76 |
| Southwest | 5.92 | 0.5 | 2.78 | 5.46 | 0.6 | 2.81 |
| West | 5.89 | 0.6 | 2.76 | 5.55 | 0.8 | 2.76 |
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 |
6.21 |
6.24 |
6.16 |
6.26 |
6.19 |
6.21 |
| Fees & Points |
0.4 |
0.2 |
0.6 |
0.2 |
0.4 |
0.5 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.92 |
5.98 |
5.86 |
5.98 |
5.92 |
5.90 |
| Fees & Points |
0.4 |
0.2 |
0.6 |
0.2 |
0.4 |
0.6 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.92 |
5.93 |
5.89 |
5.98 |
5.92 |
5.89 |
| Fees & Points |
0.5 |
0.3 |
0.7 |
0.3 |
0.5 |
0.6 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.48 |
5.54 |
5.42 |
5.35 |
5.46 |
5.55 |
| Fees & Points |
0.7 |
0.6 |
0.9 |
0.5 |
0.6 |
0.8 |
THE NATIONAL MORTGAGE RATE SNAPSHOT
|
|
||||
|
|
One Year Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.60 |
6.20 |
6.23 |
5.62 |
| Fees & Points |
0.5 |
0.5 |
0.5 |
0.7 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.15 |
5.87 |
5.89 |
5.48 |
| Fees & Points |
0.5 |
0.5 |
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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