US 30-Year Fixed Rate Mortgage Drops Slightly to Create Another New Low

Freddie Mac (OTC:FMCC) yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.57 percent with an average 0.7 point for the week ending July 8, 2010, down from last week when it averaged 4.58 percent. Last year at this time, the 30-year FRM averaged 5.20 percent. This rate is yet another all-time low in Freddie Mac’s 39-year survey.

The 15-year FRM this week averaged 4.07 percent with an average 0.7 point, up from last week when it averaged 4.04 percent.A year ago at this time, the 15-year FRM averaged 4.69 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.75 percent this week, with an average 0.7 point, down from last week when it averaged 3.79 percent. A year ago, the 5-year ARM averaged 4.82 percent. This rate is also an all-time low since Freddie Mac began tracking it in 2005.

The 1-year Treasury-indexed ARM averaged 3.75 percent this week with an average 0.7 point, downfrom last week when it averaged 3.80 percent. At this time last year, the 1-year ARM averaged 4.82 percent.

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

“With mortgage rates falling to historic lows, refinance activity has been strong over the past three months,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The Bureau of Economic Analysis reported that the effective mortgage rate of all loans outstanding was just below six percent in the first quarter of 2010, the lowest since the series began in 1977. Since the start of the second quarter, two out of three mortgage applications on average were for refinancing, according the Mortgage Bankers Association.

“Household balance sheets also improved in other ways over the first three months of the year. The Federal Reserve (Fed) reported household net worth rose by almost $1.1 trillion in the first quarter of 2010. The share of credit card loans that were 30-days or more past due fell to the lowest since first quarter of 2002, according to the American Bankers Association. Finally, the aggregate household debt burdens were at a level not seen since the third quarter of 2000, based on the Fed’s debt service ratio.”

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

Primary Mortgage Market Survey Results
July 8, 2010

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.