US Mortgage Rates Down this Week Amid Concerns Over Labor Market

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 5.20 percent with an average 0.7 point for the week ending July 9, 2009, downfrom last week when it averaged 5.32 percent.  Last year at this time, the 30-year FRM averaged 6.37 percent.

The 15-year FRM this week averaged 4.69 percent with an average 0.7 point, down from last week when it averaged 4.77 percent.  A year ago at this time, the 15-year FRM averaged 5.91 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.82 percent this week, with an average 0.6 point, downfrom last week when it averaged 4.88 percent.  A year ago, the 5-year ARM averaged 5.82 percent.

One-year Treasury-indexed ARMs averaged 4.82 percent this week with an average 0.6 point, down from last week when it averaged 4.94 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.)

“Interest rates for 30-year fixed-rate mortgages fell for the second week in a row to the lowest level in six weeks amid market concerns over a weakening labor market,” said Frank Nothaft, Feddie Mac vice president and chief economist.  “The economy lost 467,000 jobs in June, more than the market consensus, and the unemployment rate rose to 9.5 percent, the highest since August 1983.  Moreover, hourly employee wages increased at an annual rate of 0.7 percent on average in the second quarter of 2009, the smallest gain since records began in 1964.

“The weak employment situation coupled with declining home values in many markets has addied to greater defaults on home equity loans and lines of credit.  The American Bankers Association reported that the number of home equity loans that were 30-days or more delinquent rose to a record high of 3.52 percent in the first quarter and home equity lines of credit (HELOC) also reached a record of 1.89 percent.  Second liens and HELOCs totaled $1.1 trillion outstanding in the first quarter of 2009, representing nearly 10 percent of all home mortgage debt, according to the Federal Reserve Board.”

PRIMARY MORTGAGE MARKET SURVEY RESULTS

30-YEAR FIXED RATE MORTGAGES

15-YEAR FIXED RATE MORTGAGES

5/1 ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.74                2.74               2.75                2.74                2.78             2.72

1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)

Margin                        2.76                2.77               2.75                2.73                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.  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.