Freddie Mac: Strengthening Economy Raising Mortgage Rates

January 27, 2011 (Chris Moore)
mortgages-freddie-mac-image
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) which shows long and short term rates rising this week primarily due to improving economic conditions.

  • 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.

Frank Nothaft, vice president and chief economist, Freddie Mac stated, “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.

And…

“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.”

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  

Tags: 15 year fixed, 30 year fixed, fixed rate mortgage, freddie mac, interest rates, mortgage rates