US Bond Yields Rise and So Do Mortgage Rates


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Location: McLean
Author: Eileen Fitzpatrick
Date: Friday, January 28, 2011

Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) which shows long- and short-term rates rising this week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.80 percent with an average 0.7 point for the week ending January 27, 2011, up from last week when it averaged 4.74 percent. Last year at this time, the 30-year FRM averaged 4.98 percent.
  • 15-year FRM this week averaged 4.09 percent with an average 0.7 point, up from last week when it averaged 4.05 percent. A year ago at this time, the 15-year FRM averaged 4.39 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.70 percent this week, with an average 0.7 point, up from last week when it averaged 3.69 percent. A year ago, the 5-year ARM averaged 4.25 percent.
  • 1-year Treasury-indexed ARM averaged 3.26 percent this week with an average 0.6 point, up from last week when it averaged 3.25 percent. At this time last year, the 1-year ARM averaged 4.29 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 Frank Nothaft, vice president and chief economist, Freddie Mac.

  • "Mortgage rates followed bond yields a little higher this week amid positive data reports from The Conference Board that suggest the economy is strengthening. The index of leading indicators rose 1.0 percent in December, nearly twice that of the market consensus forecast and represented the sixth consecutive monthly increase, according to the Board. They also reported a stronger gain in consumer confidence for January, rising to an eight-month high. In addition, the share of households who said jobs were plentiful rose to the highest level since May 2009.
  • "Consumer demand in the housing market is also showing some positive gains. Sales of existing homes rose in December to the strongest pace since May and sales of new homes jumped to the highest since April. At their current sales rate, the expected time on the market fell from 9.5 to 8.l months for existing houses and fell from 8.4 to 6.9 months for new homes."

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

4.80

0.7

4.09

0.7

Northeast

4.83

0.6

4.16

0.6

Southeast

4.76

0.8

4.03

0.9

N. Central

4.85

0.6

4.13

0.5

Southwest

4.78

0.7

4.13

0.7

West

4.75

0.8

4.03

0.9

Five/One-Year Adjustable-Rate Mortgages

 

First Commitment Rate

Fees & Points

Margin

US

3.70

0.7

2.74

Northeast

3.82

0.6

2.76

Southeast

3.46

0.8

2.75

N. Central

3.93

0.4

2.72

Southwest

3.66

0.7

2.77

West

3.59

0.9

2.73

One-Year Adjustable-Rate Mortgages

 

First Commitment Rate

Fees & Points

Margin

US

3.26

0.6

2.77

Northeast

3.50

0.7

2.80

Southeast

3.08

0.7

2.75

N. Central

3.47

0.3

2.73

Southwest

3.43

0.7

2.80

West

2.94

0.6

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
January 27, 2011

30-Year Fixed Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

4.80

4.83

4.76

4.85

4.78

4.75

Fees & Points

0.7

0.6

0.8

0.6

0.7

0.8

15-Year Fixed Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

4.09

4.16

4.03

4.13

4.13

4.03

Fees & Points

0.7

0.6

0.9

0.5

0.7

0.9

5/1-Year Adjustable Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

3.70

3.82

3.46

3.93

3.66

3.59

Fees & Points

0.7

0.6

0.8

0.4

0.7

0.9

Margin

2.74

2.76

2.75

2.72

2.77

2.73

1-Year Adjustable Rate Mortgages

 

US

NE

SE

NC

SW

W

Average

3.26

3.50

3.08

3.47

3.43

2.94

Fees & Points

0.6

0.7

0.7

0.3

0.7

0.6

Margin

2.77

2.80

2.75

2.73

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  

4.39  

4.25  

4.29  

4.74  

4.05  

3.69  

3.25  

Fees & Points

0.6  

0.6  

0.6  

0.5  

0.8  

0.8  

0.7  

0.6  

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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