Lower US Long-Term Rates A Help To Housing Market

Freddie Mac (NYSE:FRE) released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.32 percent with an average 0.7 point for the week ending July 2, 2009, down from last week when it averaged 5.42 percent.  Last year at this time, the 30-year FRM averaged 6.35 percent.

The 15-year FRM this week averaged 4.77 percent with an average 0.7 point, down from last week when it averaged 4.87 percent.  A year ago at this time, the 15-year FRM averaged 5.92 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.88 percent this week, with an average 0.7 point, downfrom last week when it averaged 4.99 percent.  A year ago, the 5-year ARM averaged 5.78 percent.

One-year Treasury-indexed ARMs averaged 4.94 percent this week with an average 0.6 point, up slightly from last week when it averaged 4.93 percent.  At this time last year, the 1-year ARM averaged 5.17 percent.

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

“Lower mortgage rates are helping to support the housing market,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “The 30-year fixed-rate mortgage rate peaked this year over the week of June 11 and are now around a quarter-of-a-percentage point lower this week.  This has led to a 7.2 percent increase in conventional mortgage applications for home purchases by the last full week of June, according to the Mortgage Bankers Association.

“The decline in house prices may be moderating as well.  Home values fell at a monthly rate of 0.6 percent in April, representing the smallest decrease since June 2008, according to the S&P/Case-Shiller® 20-city composite index.  In addition, home prices rose in eight of the cities in April.”

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                2.75               2.75                2.75                2.78             2.70

1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.75                2.77               2.75                2.75                2.81             2.71

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.  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 survey at any time and without notice.