Long-term US Mortgage Rates Plummet

Freddie Mac (NYSE:FRE) yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.53 percent with an average 0.7 point for the week ending December 3, 2008, downfrom last week when it averaged 5.97 percent.  Last year at this time, the 30-year FRM averaged 5.96 percent.  The 30-year FRM has not been lower since January 24, 2008, when it was 5.48 percent.

The 15-year FRM this week averaged 5.33 percent with an average 0.7 point, down from last week when it averaged 5.74 percent.  A year ago at this time, the 15-year FRM averaged 5.65 percent.  The 15-year FRM has not been since March 20, 2008, when it averaged 5.27 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.77 percent this week, with an average 0.6 point, down from last week when it averaged 5.86 percent.  A year ago, the 5-year ARM averaged 5.75 percent. 

One-year Treasury-indexed ARMs averaged 5.02 percent this week with an average 0.5 point, downfrom last week when it averaged 5.18 percent.  At this time last year, the 1-year ARM averaged 5.46 percent. 

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“After Federal Reserve actions to increase liquidity in the mortgage market, interest rates for fixed-rate mortgages (FRMs) took a dive,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “This week’s decline was the largest since the week of November 27, 1981, 2008, and 30-year FRM rates are now almost a full percentage point lower since the last week in October, 2008.

“The recent plunge in rates contributed to the nearly 150 percent jump in conventional mortgage applications over the Thanksgiving week, led by almost a 300 percent surge in refinances, according to the Mortgage Bankers Association.  Roughly three out of four mortgage applications were for refinance transactions, up from around half during the prior week.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

PRIMARY MORTGAGE MARKET SURVEY RESULTS

30-YEAR FIXED RATE MORTGAGES

15-YEAR FIXED RATE MORTGAGES

5/1 ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.74                2.73               2.75                2.77                2.68             2.73

1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.74                2.73               2.75                2.71                2.79             2.75

THE NATIONAL MORTGAGE RATE SNAPSHOT

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.