Signs of Moderation in Inflation Causes US Mortgage Rates to Slip
Location: McLean
Author:
Eileen Fitzpatrick
Date: Friday, April 20, 2007
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.92 percent this week, with an average 0.6 point, down slightly from last week when it averaged 5.93 percent. A year ago, the 5-year ARM averaged 6.16 percent.
One-year Treasury-indexed ARMs averaged 5.45 percent this week with an average 0.7 point, also down slightly from last week when it averaged 5.47 percent. At this time last year, the 1-year ARM averaged 5.63 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Mortgage rates slipped following the latest reports of moderation in inflation rates from the core producer price and consumer price indexes," said Frank Nothaft, Freddie Mac vice president and chief economist. "Excluding food and energy, the core inflation rate for consumer prices rose 2.5 percent year-over-year, the smallest annual growth since May 2006. This helped calm markets and brought mortgage rates down.
"The low
mortgage rates that have prevailed so far in 2007 may have a stabilizing
effect on the housing sector. Both housing starts and new permits for
March came in above expectations, but February's housing starts numbers
were revised downward. Because of weather-induced fluctuations in
housing statistics, we will have to see what the numbers show later in
the Spring to gauge whether the March readings are indeed a signal of
market turnaround."
|
SUMMARY OF SURVEY RESULTS |
||||
|
Fixed-Rate Mortgages |
||||
| Average Conventional 30-Year Commitment Rate | Fees & Points | Average Conventional 15-Year Commitment Rate | Fees & Points | |
| US | 6.17 | 0.5 | 5.89 | 0.5 |
| Northeast | 6.24 | 0.2 | 5.95 | 0.2 |
| Southeast | 6.12 | 0.6 | 5.84 | 0.7 |
| North Central | 6.22 | 0.3 | 5.94 | 0.3 |
| Southwest | 6.17 | 0.5 | 5.92 | 0.5 |
| West | 6.12 | 0.7 | 5.85 | 0.8 |
|
Adjustable–Rate Mortgages |
||||||
| 5/1 ARM Commitment Rate | Fees & Points |
Margin |
1 Year ARM Commitment Rate | Fees & Points | Margin | |
| US | 5.92 | 0.6 | 2.77 | 5.45 | 0.7 | 2.77 |
| Northeast | 5.99 | 0.4 | 2.78 | 5.63 | 0.6 | 2.76 |
| Southeast | 5.86 | 0.8 | 2.76 | 5.45 | 0.9 | 2.78 |
| North Central | 5.97 | 0.4 | 2.76 | 5.40 | 0.4 | 2.75 |
| Southwest | 5.91 | 0.7 | 2.77 | 5.29 | 0.8 | 2.79 |
| West | 5.88 | 0.8 | 2.77 | 5.38 | 0.7 | 2.78 |
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
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.
|
Freddie Mac Region |
PMMS Weights |
|
Northeast |
24.5 |
|
Southeast |
18.6 |
|
North Central |
15.4 |
|
Southwest |
10.4 |
|
West |
31.0 |
PRIMARY MORTGAGE MARKET SURVEY RESULTS
30-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
6.17 |
6.24 |
6.12 |
6.22 |
6.17 |
6.12 |
| Fees & Points |
0.5 |
0.2 |
0.6 |
0.3 |
0.5 |
0.7 |
15-YEAR FIXED RATE MORTGAGES
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.89 |
5.95 |
5.84 |
5.94 |
5.92 |
5.85 |
| Fees & Points |
0.5 |
0.2 |
0.7 |
0.3 |
0.5 |
0.8 |
5/1 ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.92 |
5.99 |
5.86 |
5.97 |
5.91 |
5.88 |
| Fees & Points |
0.6 |
0.4 |
0.8 |
0.4 |
0.7 |
0.8 |
1-YEAR ADJUSTABLE RATE MORTGAGES (ARMs)
|
|
||||||
|
US |
NE |
SE |
NC |
SW |
W |
|
| AVERAGE |
5.45 |
5.63 |
5.45 |
5.40 |
5.29 |
5.38 |
| Fees & Points |
0.7 |
0.6 |
0.9 |
0.4 |
0.8 |
0.7 |
THE NATIONAL MORTGAGE RATE SNAPSHOT
|
|
||||
|
|
One Year Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.53 |
6.17 |
6.16 |
5.63 |
| Fees & Points |
0.6 |
0.5 |
0.8 |
0.9 |
|
|
||||
|
|
One Week Ago | |||
|
|
30-YR FRM |
15-YR FRM |
5/1 ARM |
1-YR ARM |
| AVERAGE |
6.22 |
5.90 |
5.93 |
5.47 |
| Fees & Points |
0.4 |
0.4 |
0.5 |
0.5 |
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.
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