Mortgage Rates Rise Again on News of Growth in Durable Goods
Orders
by Eileen B. Fitzpatrick
June 1, 2007
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results
of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year
fixed-rate mortgage (FRM) averaged 6.42 percent with an average 0.4 point for
the week ending May 31, 2007, up from last week when it averaged 6.37 percent.
Last year at this time, the 30-year FRM averaged 6.67 percent.
The 15-year FRM this week averaged 6.12 percent with an average 0.4 point, up
from last week when it averaged 6.06 percent. A year ago, the 15-year FRM
averaged 6.26 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.19
percent this week, with an average 0.5 point, up from last week when it
averaged 6.02 percent. A year ago, the 5-year ARM averaged 6.26 percent.
One-year Treasury-indexed ARMs averaged 5.57 percent this week with an average
0.6 point, down from last week when it averaged 5.64 percent. At this time last
year, the 1-year ARM averaged 5.68 percent.
(Average commitment rates should be reported along with average fees and points
to reflect the total cost of obtaining the mortgage.)
“Interest rates on fixed-rate mortgages increased further this week following
stronger growth in orders for durable goods,” said Frank Nothaft, Freddie Mac
vice president and chief economist. “Recent reports have indicated that
economic growth outside of the housing market remains robust, with a healthy
consumer sector and improving business spending.
“April’s total home sales (including condominiums and co-ops) were below the
pace of last year, and the S&P/Case-Shiller® 20-market composite index shows
home values off by 1.4 percent over the year ending March.”
Freddie Mac is a stockholder-owned corporation established by Congress in 1970
to support homeownership and rental housing. Freddie Mac purchases
single-family and multifamily residential mortgages and mortgage-related
securities, which it finances primarily by issuing mortgage pass through
securities and debt instruments in the capital markets. Over the years, Freddie
Mac has made home possible more than 50 million times, ensuring financing for
one in six homebuyers and more than four million renters. For additional
information about Freddie Mac, visit:
www.FreddieMac.com.
Freddie Mac defines its regions as follows:
Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI,
CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU
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. Freddie Mac may
change the methodology used to conduct the PMMS survey at any time and without
notice.
DEFINITIONS
Commitment Rate is the interest rate a lender would charge to
lend mortgage money to a qualified borrower exclusive of the fees and points
required by the lender. This commitment rate applies only to conventional
financing on conforming mortgages with loan-to-value rates of 80 percent or
less.
ARM Index is the One-year Treasury
Loan to Value Ratio (LTV) is the ratio of the loan amount of a
mortgage loan to the lower of the appraisal value or purchase price of the
property securing the loan.
Origination Fees and Discount Points are the total charged by
the lender at settlement. One point equals one percent of the loan amount.
Margin is a fixed amount added to the underlying index to
establish the fully indexed rate for an ARM.
Weighted Averages for the Primary Mortgage Market Survey have
been adjusted as of October 26, 2006. The new weights use the dollar volume of
conventional mortgage originations within the 1-unit Freddie Mac loan limit as
reported under the Home Mortgage Disclosure Act (HMDA) for 2005. The weights
are listed in the table below.
PRIMARY MORTGAGE MARKET SURVEY RESULTS
MEDIA CONTACT:
Eileen B. Fitzpatricl
703.903.2446
eileen_Fitzpatrick@freddiemac.com