US Long-Term Mortgage Rates Inch Up To Just Over 5 Percent

Location: McLean
Author: Eileen Fitzpatrick
Date: Monday, December 28, 2009

Freddie Mac (NYSE:FRE) last week released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.05 percent with an average 0.7 point for the week ending December 24, 2009, up from last week when it averaged 4.94 percent. Last year at this time, the 30-year FRM averaged 5.14 percent.

The 15-year FRM this week averaged 4.45 percent with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago at this time, the 15-year FRM averaged 4.91 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago, the 5-year ARM averaged 5.49 percent.

The 1-year Treasury-indexed ARM averaged 4.38 percent this week with an average 0.6 point, up from last week when it averaged 4.34 percent. At this time last year, the 1-year ARM averaged 4.95 percent.

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

"Although interest rates for 30-year fixed-rate mortgages are above 5 percent this week for the first time since the end of October, they are still around 0.5 percentage points below this year’s peak set in mid-June,” said Frank Nothaft, Freddie Mac vice president and chief economist. "ARM rates increased by a lesser amount as the market consensus calls for no rate hikes by the Federal Reserve in the immediate future.

"Meanwhile, the housing market continues to show improvement. Total existing home sales jumped 7.4 percent in November to an annualized pace of 6.54 million units, which was the most since February 2007. Moreover, the number of unsold existing homes was the lowest since December 2006 and the number of unsold new homes was the least since April 1971, which may leave future room for new construction.”

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.

Summary of Survey Results

Fixed-Rate Mortgages
	Average Conventional 30-Year Commitment Rate	Fees & Points	Average Conventional 15-Year Commitment Rate	Fees & Points
US	5.05	0.7	4.45	0.6
Northeast	5.05	0.7	4.46	0.6
Southeast	5.02	0.6	4.46	0.6
N. Central	5.09	0.7	4.42	0.7
Southwest	5.08	0.5	4.51	0.5
West	5.03	0.8	4.44	0.6

Five/One-Year Adjustable-Rate Mortgages
	First Commitment Rate	Fees & Points	Margin
US	4.40	0.6	2.74
Northeast	4.47	0.4	2.71
Southeast	4.20	0.7	2.75
N. Central	4.65	0.6	2.75
Southwest	4.45	0.6	2.78
West	4.29	0.6	2.75

One-Year Adjustable-Rate Mortgages
	First Commitment Rate	Fees & Points	Margin
US	4.38	0.6	2.75
Northeast	4.13	0.4	2.70
Southeast	4.38	0.6	2.75
N. Central	4.79	0.3	2.75
Southwest	4.45	0.5	2.83
West	4.36	0.8	2.75

Freddie Mac Region	PMMS Weights
Northeast	26.0
Southeast	16.7
North Central	15.9
Southwest	13.2
West	28.2

Primary Mortgage Market Survey Results
December 24, 2009

30-Year Fixed Rate Mortgages
		US		NE			SE		NC		SW		W
Average		5.05		5.05			5.02		5.09		5.08		5.03
Fees & Points		0.7		0.7			0.6		0.7		0.5		0.8
15-Year Fixed Rate Mortgages
		US		NE			SE		NC		SW		W
Average		4.45		4.46			4.46		4.42		4.51		4.44
Fees & Points		0.6		0.6			0.6		0.7		0.5		0.6
5/1-Year Adjustable Rate Mortgages
		US		NE			SE		NC		SW		W
Average		4.40		4.47			4.20		4.65		4.45		4.29
Fees & Points		0.6		0.4			0.7		0.6		0.6		0.6
Margin		2.74		2.71			2.75		2.75		2.78		2.75
1-Year Adjustable Rate Mortgages
		US		NE			SE		NC		SW		W
Average		4.38		4.13			4.38		4.79		4.45		4.36
Fees & Points		0.6		0.4			0.6		0.3		0.5		0.8
Margin		2.75		2.70			2.75		2.75		2.83		2.75
The National Mortgage Rate Snapshot
	One Year Ago							One Week Ago
	30-YR		15-YR		5/1-YR	1-YR ARM		30-YR		15-YR		5/1-YR	1-YR ARM
Average	5.14		4.91		5.49	4.95		4.94		4.38		4.37	4.34
Fees & Points	0.8		0.7		0.6	0.6		0.7		0.6		0.6	0.5
Margin	N/A		N/A		2.75	2.74		N/A		N/A		2.74	2.75

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. In general, the data presented were calculated from information collected Monday through Wednesday of the same week that the PMMS is released and may not reflect mortgage rates, fees or points currently available from any lender. Freddie Mac may change the methodology used to conduct the PMMS at any time and without notice.