Continuing Slow Economic Signals See Mortgage Rates Fall for All Products this Week

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 5.04 percent with an average 0.7 point for the week ending February 19, 2009, down from last week when it averaged 5.16 percent.  Last year at this time, the 30-year FRM averaged 6.04 percent.

The 15-year FRM this week averaged 4.68 percent with an average 0.6 point, down from last week when it averaged 4.81 percent.  A year ago at this time, the 15-year FRM averaged 5.64 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.04 percent this week, with an average 0.6 point, downfrom last week when it averaged 5.23 percent.  A year ago, the 5-year ARM averaged 5.37 percent. 

One-year Treasury-indexed ARMs averaged 4.80 percent this week with an average 0.5 point, downfrom last week when it averaged 4.94 percent.  At this time last year, the 1-year ARM averaged 4.98 percent. 

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

“Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “And consumer sentiment fell in February for the first time in three months to near its lowest level since May 1980, while industrial production slowed in January by more than the market consensus.  In addition, the Federal Reserve lowered its growth forecasts for this year during its policy-setting meeting on January 27-28, noting a deeper contraction in the economy as the credit crunch tightens.

“Meanwhile, the housing market is not doing any better.  New housing construction slowed to an all-time record low of 466,000 homes (annualized) in January since records began in January 1959.  And although homebuilder confidence ticked up in February from a record low, builder expectations of sales over the next six months hit a record low since it was first published in January 1985.”

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                        2.71                2.58               2.75                2.74                2.78             2.73

1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.75                2.74               2.75                2.71                2.81             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.