Mortgage Rates Shrug Off Turmoil Posting New Lows for 2011

August 12, 2011 (Shirley Allen)

Mortgage interest rates followed Treasury yields to their lowest level in 2011 with the 15 year fixed-rate mortgage and the 5-year and 1-year ARMs reaching historic lows, shrugging off last weeks debt crisis and credit downgrade according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS).

Fixed Rate Mortgages (FRM):

Thirty year and the 15 year FRMs posted another round of new 2011 lows with the 30 year FRM averaging 4.32 percent with an average of 0.7 points, down from 4.39 percent reported the previous week. The 30 year FRM averaged 4.44 percent a year earlier.

The 15 year FRM set another historic low averaging 3.50 percent this week with an average 0.7 points, down from 3.54 percent reported the previous week, and down from 3.92 percent a year ago.

Adjustable Rate Mortgages (ARM):

ARM interest rates both hit record lows with the 5-year Treasury-indexed hybrid ARM averaging 3.13 percent, with an average of 0.5 points, which was down from 3.18 percent the previous week. The 5 year ARM averaged 3.56 percent a year earlier.

The 1-year Treasury-indexed ARM averaged 2.89 percent this week with an average of 0.5 points, down from 3.02 percent the previous week. A year ago, the 1 year ARM averaged 3.53 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Renewed market concerns about the European debt markets led investors to shift funds into U.S. Treasuries, pushing long-term yields lower. Further, in its August 9th Federal Open Market Committee statement, the Federal Reserve noted that economic growth so far this year had been considerably slower than it expected and that overall labor market conditions had deteriorated in recent months, leading the Committee to conclude that an exceptionally low federal funds rate should be maintained at least through mid-2013. These developments helped to ease mortgage rates lower this week.”

“Lower mortgage rates will help to maintain the high degree of home-buyer affordability in the market. The National Association of Realtors® reported that its affordability index over the past three quarters has indicated the highest affordability since the inception of the index in 1970,” he added.

30-Year Fixed Rate Mortgages US NE SE NC SW W
Average 4.32 4.33 4.38 4.32 4.34 4.26
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 3.50 3.50 3.59 3.48 3.59 3.43
Fees & Points 0.7 0.6 0.8 0.4 0.6 0.7

5/1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 3.13 3.24 3.08 3.20 3.20 3.00
Fees & Points 0.5 0.4 0.7 0.4 0.6 0.7
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 2.89 2.99 2.75 3.08 3.00 2.70
Fees & Points 0.5 0.6 0.6 0.4 0.8 0.5
Margin 2.76 2.78 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 4.44   3.92   3.56   3.53   4.39   3.54   3.18   3.02  
Fees & Points 0.7   0.6   0.7   0.7   0.8   0.7   0.6   0.5  
Margin N/A N/A 2.74   2.77   N/A N/A 2.70   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