Fixed Rate Mortgages Hit Record Lows after Fed Announcement

September 29, 2011 (Shirley Allen)

Fifteen year and 30 year fixed rate mortgages hit record lows this week following the announcement of Federal Reserve’s new economic easing program according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS)

Fixed Rate Mortgages (FRM):

The 30 year FRM set an all-time low averaging 4.01 percent with an average of 0.7 points, down from last week’s average of 4.09 percent. The 30 year FRM averaged 4.32 percent a year earlier.

Of the five regions that Freddie Mac surveys, the West region recorded the lowest average rate of 3.95 percent for a 30 year fixed rate mortgage.

The 15 year FRM also set a new low averaging 3.28 percent this week with an average 0.7 points, down from 3.29 percent reported the previous week, and down from 3.75 percent a year ago.

Adjustable Rate Mortgages (ARM):

ARM interest rates increased slightly this week with the 5-year Treasury-indexed hybrid ARM averaging 3.02 percent, unchanged from last week, with an average of 0.6 points. The 5 year ARM averaged 3.52 percent a year earlier.

The 1-year Treasury-indexed ARM increased one basis point, averaging 2.83 percent this week with an average of 0.6 points, up from 2.82 percent the previous week. A year ago, the 1 year ARM averaged 3.48 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Fixed mortgage rates fell to all-time record lows this week following the Federal Reserve’s announcement of its Maturity Extension Program and additional purchases of mortgage-backed securities. Interest rates for ARMs, however, were nearly unchanged as the Federal Reserve plans to sell $400 billion in short-term Treasury securities, which serve as benchmarks for many ARMs.”

“Meanwhile, the spring and summer home-buying season gave a boost to a number of house price indexes. The Federal Housing Finance Agency reported that its National index (not seasonally adjusted) rose for the fourth consecutive month in July. Similarly, the S&P/Case-Shiller® 20-City composite index, which has a broader scope of properties, rose 0.9 percent between June and July with 17 of the cities experiencing positive monthly growth. Finally, CoreLogic® reported that its index, excluding distressed sales, increased at a 1.7 percent monthly rate for the same month,” he added.

30-Year Fixed Rate Mortgages US NE SE NC SW W
Average 4.01 4.01 4.09 4.02 4.08 3.95
Fees & Points 0.7 0.7 0.8 0.6 0.7 0.8

15-Year Fixed Rate Mortgages US NE SE NC SW W
Average 3.28 3.28 3.30 3.28 3.36 3.25
Fees & Points 0.7 0.7 0.8 0.4 0.7 0.7

5/1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 3.02 3.10 3.00 3.15 3.05 2.88
Fees & Points 0.6 0.6 0.6 0.4 0.7 0.6
Margin 2.74 2.74 2.75 2.73 2.76 2.73

1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 2.83 2.90 2.72 3.14 2.71 2.70
Fees & Points 0.6 0.7 0.6 0.4 0.6 0.5
Margin 2.76 2.80 2.75 2.73 2.77 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 4.32   3.75   3.52   3.48   4.09   3.29   3.02   2.82  
Fees & Points 0.8   0.7   0.6   0.7   0.7   0.6   0.6   0.6  
Margin N/A N/A 2.75   2.77   N/A N/A 2.74   2.76  

Tags: 15 year fixed, 30 year fixed, fixed rate mortgage, freddie mac, interest rates, mortgage rates, 5-year hybrid, 1-year treasury

Source:
Freddie Mac