Modest Inflation Expectations Allow US Mortgage Rates
to Once Again Set New Record Lows
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, September 3, 2010
Freddie Mac (OTC: FMCC) yesterday released the
results of its Primary Mortgage Market Survey (PMMS), and for yet
another week, fixed-rate mortgages reached record lows, as did the
5-year adjustable rate in this survey. (The 30-year fixed-rate survey
began in 1971, the 15-year began in 1991, and the 5-year adjustable in
2005.)
News Facts
- 30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an
average 0.7 point for the week ending September 2, 2010, down from
last week when it averaged 4.36 percent. Last year at this time, the
30-year FRM averaged 5.08 percent.
- 15-year FRM this week averaged a record low of 3.83 percent with
an average 0.6 point, down from last week when it averaged 3.86
percent. A year ago at this time, the 15-year FRM averaged 4.54
percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM)
averaged 3.54 percent this week, with an average 0.6 point, down
from last week when it averaged 3.56 percent. A year ago, the 5-year
ARM averaged 4.59 percent.
- 1-year Treasury-indexed ARM averaged 3.50 percent this week with
an average 0.7 point, down from last week when it averaged 3.52
percent. At this time last year, the 1-year ARM averaged 4.62
percent.
Average commitment rates should be reported along with average fees
and points to reflect the total cost of obtaining the mortgage.
Quotes
Attributed to Amy Crews Cutts, deputy chief economist, Freddie Mac.
- "The 12-month price growth of
core personal
expenditures remained at 1.4 percent in July, which kept overall
inflation expectations well at bay. Fed chairman Bernanke reiterated
this in his
August 27th speech in Wyoming, noting that with inflation
expectations reasonably stable and the economy growing, inflation
should remain near current readings for some time before rising
slowly. As a result, mortgage rates eased further this week to new
historic lows.
- "House prices, however, appear to be firming. Home prices rose
2.3 percent between the first and second quarter of this year,
reaching the highest level since the fourth quarter of 2008,
according to the
S&P/Case Shiller® National Home Price Index. In addition, 15
metropolitan areas in the 20-City Composite Index experienced annual
house price growth in June, compared to 13 in May and 11 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.
Summary of Survey Results
Fixed-Rate Mortgages
|
|
Average Conventional
30-Year Commitment Rate
|
Fees & Points
|
Average Conventional
15-Year Commitment Rate
|
Fees & Points
|
US
|
4.32
|
0.7
|
3.83
|
0.6
|
Northeast
|
4.36
|
0.6
|
3.87
|
0.6
|
Southeast
|
4.36
|
0.8
|
3.90
|
0.7
|
N. Central
|
4.26
|
0.6
|
3.75
|
0.5
|
Southwest
|
4.39
|
0.6
|
3.87
|
0.6
|
West
|
4.26
|
0.8
|
3.78
|
0.6
|
Five/One-Year Adjustable-Rate Mortgages
|
|
First Commitment Rate
|
Fees & Points
|
Margin
|
US
|
3.54
|
0.6
|
2.75
|
Northeast
|
3.69
|
0.5
|
2.77
|
Southeast
|
3.38
|
0.6
|
2.75
|
N. Central
|
3.49
|
0.4
|
2.73
|
Southwest
|
3.63
|
0.8
|
2.80
|
West
|
3.51
|
0.7
|
2.73
|
One-Year Adjustable-Rate Mortgages
|
|
First Commitment Rate
|
Fees & Points
|
Margin
|
US
|
3.50
|
0.7
|
2.77
|
Northeast
|
3.57
|
0.6
|
2.79
|
Southeast
|
3.42
|
0.8
|
2.75
|
N. Central
|
3.43
|
0.4
|
2.75
|
Southwest
|
3.64
|
0.8
|
2.80
|
West
|
3.48
|
0.9
|
2.75
|
Freddie Mac Region
|
PMMS Weights
|
|
Northeast
|
26.0
|
|
Southeast
|
16.7
|
|
North Central
|
15.9
|
|
Southwest
|
13.2
|
|
West
|
28.2
|
|
|
|
|
|
|
|
|
|
Primary Mortgage Market Survey Results
September 2, 2010
30-Year Fixed Rate Mortgages
|
|
US
|
NE
|
SE
|
NC
|
SW
|
W
|
Average
|
4.32
|
4.36
|
4.36
|
4.26
|
4.39
|
4.26
|
Fees & Points
|
0.7
|
0.6
|
0.8
|
0.6
|
0.6
|
0.8
|
15-Year Fixed Rate Mortgages
|
|
US
|
NE
|
SE
|
NC
|
SW
|
W
|
Average
|
3.83
|
3.87
|
3.90
|
3.75
|
3.87
|
3.78
|
Fees & Points
|
0.6
|
0.6
|
0.7
|
0.5
|
0.6
|
0.6
|
5/1-Year Adjustable Rate Mortgages
|
|
US
|
NE
|
SE
|
NC
|
SW
|
W
|
Average
|
3.54
|
3.69
|
3.38
|
3.49
|
3.63
|
3.51
|
Fees & Points
|
0.6
|
0.5
|
0.6
|
0.4
|
0.8
|
0.7
|
Margin
|
2.75
|
2.77
|
2.75
|
2.73
|
2.80
|
2.73
|
1-Year Adjustable Rate Mortgages
|
|
US
|
NE
|
SE
|
NC
|
SW
|
W
|
Average
|
3.50
|
3.57
|
3.42
|
3.43
|
3.64
|
3.48
|
Fees & Points
|
0.7
|
0.6
|
0.8
|
0.4
|
0.8
|
0.9
|
Margin
|
2.77
|
2.79
|
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
|
5.08
|
4.54
|
4.59
|
4.62
|
4.36
|
3.86
|
3.56
|
3.52
|
Fees & Points
|
0.7
|
0.6
|
0.6
|
0.6
|
0.7
|
0.6
|
0.6
|
0.7
|
Margin
|
N/A
|
N/A
|
2.74
|
2.76
|
N/A
|
N/A
|
2.75
|
2.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
To subscribe or visit go to:
http://www.riskcenter.com
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