Mortgage Interest Rates Fall after Four Week Climb

August 31, 2012 (Shirley Allen)

Interest rates for fixed rate mortgages fell for the first time in five weeks as bond yields fell on news of a slowing economy according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS) for the week ending August 30th.

Fixed Rate Mortgages:

Interest rates on fixed rate mortgages moved lower this week, with the 30-year fixed rate averaging 3.59 percent with an average of 0.6 points, down from the previous week’s average of 3.66 percent. It was the 23rd consecutive week that mortgage rates have been under four percent. A year ago, the 30-year fixed rate mortgage averaged 4.22 percent.

Average 30-year rates were lowest in the North Central area of the United States while the highest rates were reported in the Southeastern area of the country.

The 15-year fixed rate mortgage averaged 2.86 percent with an average of 0.6 points, up from last week’s average of 2.89 percent. Mortgage rates for the 15-year fixed mortgage have been under three percent for 14 consecutive weeks. At this time last year, the 15-year fixed rate mortgage averaged 3.39 percent.

Adjustable Rate Mortgages:

Interest rates for adjustable-rate mortgages were also down this week with the 5-year Treasury-indexed hybrid ARM averaging 2.78 percent, with an average of 0.6 points, down from last week’s average of 2.80 percent. The 5-year adjustable rate mortgage averaged 2.96 percent a year earlier.

The 1-year Treasury-indexed adjustable rate mortgage averaged 2.63 percent with an average of 0.4 points, down from last week’s average of 2.66 percent. A year ago, the 1-year adjustable rate mortgage averaged 2.93 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Treasury bond yields fell, allowing mortgage rates to follow, after the release of the July 31st and August 1st minutes of the Federal Reserve’s monetary policy committee. Committee members agreed that economic activity had decelerated more in recent months than they had anticipated at their last meeting in June. Some members even saw room for additional stimulus fairly soon if needed.”

30-Year Fixed Rate Mortgages US NE SE NC SW W
Average 3.59 3.59 3.64 3.57 3.61 3.58
Fees & Points 0.6 0.6 0.6 0.6 0.6 0.6

15-Year Fixed Rate Mortgages US NE SE NC SW W
Average 2.86 2.85 2.90 2.84 2.89 2.85
Fees & Points 0.6 0.6 0.6 0.6 0.6 0.6

5/1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 2.78 2.83 2.78 2.85 2.79 2.69
Fees & Points 0.6 0.6 0.7 0.6 0.7 0.5
Margin 2.74 2.73 2.75 2.73 2.76 2.74

1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 2.63 2.55 2.69 2.68 2.70 2.60
Fees & Points 0.4 0.5 0.5 0.3 0.4 0.3
Margin 2.76 2.80 2.78 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 4.22   3.39   2.96   2.89   3.66   2.89   2.80   2.66  
Fees & Points 0.7   0.6   0.6   0.6   0.7   0.7   0.6   0.4  
Margin N/A N/A 2.74   2.76   N/A N/A 2.74   2.77  

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