Mortgage Rates Down to Lowest Level in Three Months

RISMEDIA, August 24, 2009-Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.12% with an average 0.7 point for the week ending August 20, 2009, down from last week when it averaged 5.29%. Last year at this time, the 30-year FRM averaged 6.47%.

The 15-year FRM this week averaged 4.56% with an average 0.7 point, down from last week when it averaged 4.68%. A year ago at this time, the 15-year FRM averaged 6.00%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.57% this week, with an average 0.6 point, down from last week when it averaged 4.75%. A year ago, the 5-year ARM averaged 5.99%.

One-year Treasury-indexed ARMs averaged 4.69% this week with an average 0.5 point, down from last week when it averaged 4.72%. At this time last year, the 1-year ARM averaged 5.29%.

“U.S. Treasury bond yields fell nearly a quarter of a percentage point over the week, and other long-term yields followed suit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates on 30-year and 15-year fixed-rate mortgages fell to the lowest level since the end of May 2009, while initial rates on 5/1 hybrid ARMs declined to levels not seen since January 2005.

“Low mortgage rates are helping to reinforce the housing market. New construction on one-family homes rose for the fifth consecutive month in July 2009 to an annualized pace of almost 500,000 homes, the most since October 2008. In addition, homebuilder views of housing market conditions for the remainder of the year rose for the second month in a row in August to the most positive reading since June 2008, according to the National Association of Home Builders.”

For more information, visit www.freddiemac.com.