Little Movement in US Mortgage Rates this Week

Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.16 percent with an average 0.4 point for the week ending March 22, 2007, up from last week when it averaged 6.14 percent.  Last year at this time, the 30-year FRM averaged 6.32 percent. 

The 15-year FRM this week averaged 5.90 percent with an average 0.4 point, up from last week when it averaged 5.88 percent.  A year ago, the 15-year FRM averaged 5.97 percent. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.91 percent this week, with an average 0.6 point, up slightly from last week when it averaged 5.90 percent.  A year ago, the 5-year ARM averaged 5.96 percent. 

One-year Treasury-indexed ARMs averaged 5.40 percent this week with an average 0.7 point, down from last week when it averaged 5.42 percent.  At this time last year, the 1-year ARM averaged 5.41 percent. 

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mortgage rates were stable this week as the bond market took readings on producer prices and consumer prices in stride,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “Excluding food and energy, core inflation at the wholesale level was up more than had been anticipated in February, but at the retail level the increase was in line with expectations. Weighing the relevant factors, The Fed decided to leave the target federal funds rate unchanged at 5.25 percent.

“Looking at the housing market, construction of new homes picked up in February after falling to a ten-year low in January. The improvement was better than consensus forecasts. Next week’s release of February’s new and existing home sales will provide further insight into the health of the housing sector."

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.

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