Low Inflation Keeps Mortgage Rates Relatively Flat This Week

Location: McLean
Author: Eileen Fitzpatrick
Date: Monday, November 8, 2010

Freddie Mac (OTC: FMCC) last week released the results of its Primary Mortgage Market Survey (PMMS), which found that the 30-year fixed-rate mortgage rate rose slightly for the third consecutive week.  The 15-year fixed-rate mortgage rate eased back down a little while the 5-year and 1-year ARMs set another low.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.24 percent with an average 0.8 point for the week ending November 4, 2010, up slightly from last week when it averaged 4.23 percent.  Last year at this time, the 30-year FRM averaged 4.98 percent.
  • 15-year FRM this week averaged 3.63 percent with an average 0.7 point, down from last week when it averaged 3.66 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.39 percent this week, with an average 0.6 point, down from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 4.35 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.
  • 1-year Treasury-indexed ARM averaged 3.26 percent this week with an average 0.7 point, down from last week when it averaged 3.30 percent. At this time last year, the 1-year ARM averaged 4.47 percent. The 1-year ARM sets another survey low this week.

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

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “With little sign of inflation to push up long-term interest rates, fixed mortgage rates held relatively steady this week, while ARM rates hit new all-time record lows. The core price index for personal expenditures, a gauge closely followed by the Federal Reserve (Fed), rose 1.1 percent over the 12-months ending in September and represented the smallest increase since September 2001. In its November 3rd monetary policy committee statement, the Fed affirmed that measures of underlying inflation are somewhat low, relative to levels that the committee judges to be consistent, over the longer run, with its dual mandate.”

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

4.24

0.8

3.63

0.7

Northeast

4.23

0.8

3.63

0.7

Southeast

4.32

0.9

3.72

0.8

N. Central

4.22

0.7

3.63

0.6

Southwest

4.24

0.8

3.66

0.7

West

4.21

0.9

3.58

0.8

Five/One-Year Adjustable-Rate Mortgages

 

First Commitment Rate

Fees & Points

Margin

US

3.39

0.6

2.75

Northeast

3.48

0.6

2.77

Southeast

3.25

0.6

2.75

N. Central

3.46

0.4

2.73

Southwest

3.45

0.7

2.79

West

3.31

0.8

2.73

One-Year Adjustable-Rate Mortgages

 

First Commitment Rate

Fees & Points

Margin

US

3.26

0.7

2.77

Northeast

3.22

0.6

2.81

Southeast

3.19

0.8

2.75

N. Central

3.43

0.3

2.75

Southwest

3.36

0.8

2.80

West

3.20

1.0

2.75

Freddie Mac Region

PMMS Weights

 

Northeast

27.1

 

Southeast

13.6

 

North Central

17.2

 

Southwest

12.8

 

West

29.3

 
               

Primary Mortgage Market Survey Results
November 4, 2010

30-Year Fixed Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

4.24

4.23

4.32

4.22

4.24

4.21

Fees & Points

0.8

0.8

0.9

0.7

0.8

0.9

15-Year Fixed Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

3.63

3.63

3.72

3.63

3.66

3.58

Fees & Points

0.7

0.7

0.8

0.6

0.7

0.8

5/1-Year Adjustable Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

3.39

3.48

3.25

3.46

3.45

3.31

Fees & Points

0.6

0.6

0.6

0.4

0.7

0.8

Margin

2.75

2.77

2.75

2.73

2.79

2.73

1-Year Adjustable Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

3.26

3.22

3.19

3.43

3.36

3.20

Fees & Points

0.7

0.6

0.8

0.3

0.8

1.0

Margin

2.77

2.81

2.75

2.75

2.80

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

4.98  

4.40  

4.35  

4.47  

4.23  

3.66  

3.41  

3.30  

Fees & Points

0.7  

0.6  

0.6  

0.5  

0.8  

0.7  

0.6  

0.7  

Margin

N/A

N/A

2.74  

2.75  

N/A

N/A

2.75  

2.76  
                           

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.

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