Long and Short Term Mortgage Rates Reach 10 Month
Highs
by Eileen B. Fitzpatrick
June 8, 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 6.53 percent with an average 0.4
point for the week ending June 7, 2007, up from last week when it averaged 6.42
percent. Last year at this time, the 30-year FRM averaged 6.62 percent.
The 30-year FRM has not been higher since the week ending August 10, 2006, when it averaged 6.55 percent.
The 15-year FRM this week averaged 6.22 percent with an average 0.4
point, up from last week when it averaged 6.12 percent. A year ago, the 15-year
FRM averaged 6.23 percent. The 15-year FRM has not been higher since the week
ending August 3, 2006, when it averaged 6.27 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs)
averaged 6.24 percent this week, with an average 0.6 point, up from last week
when it averaged 6.19 percent. A year ago, the 5-year ARM averaged 6.20
percent. The 5-year ARM has not been higher since the week ending August 3,
2006, when it averaged 6.27 percent.
One-year Treasury-indexed ARMs averaged 5.65 percent this week with an
average 0.7 point, up from last week when it averaged 5.57 percent. At this
time last year, the 1-year ARM averaged 5.63 percent. The 1-year ARM has not
been higher since the week ending August 10, 2006, when it averaged 5.69
percent.
(Average commitment rates should be reported along with average fees and
points to reflect the total cost of obtaining the mortgage.)
“Mortgage rates climbed this week owing to market concerns of a tight
labor force and wage growth. May’s unemployment rate remained at the second
lowest level since May 2001 while average hourly earnings rose,” said Frank
Nothaft, Freddie Mac vice president and chief economist. “Additionally, unit
labor costs increased 1.8 percent over the first three months of the year,
tripling the original estimate, and fueling inflation fears.
“Meanwhile, Freddie Mac released a new purchase-transaction only version
of its Conventional Mortgage Home Price Index this week which showed a sharp
deceleration in house-price appreciation in the first quarter of 2007. As house
prices grow less quickly and household incomes rise, the housing market will
likely recover from its current slump, but perhaps not before the end of this
year.”
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 Fitzpatrick
703.903.2446
eileen_Fitzpatrick@freddiemac.com