Long-Term Mortgage Rates at Second Highest Level This Year

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 5.08 percent with an average 0.7 point for the week ending April 1, 2010, up from last week when it averaged 4.99 percent.  Last year at this time, the 30-year FRM averaged 4.78 percent.

The 15-year FRM this week averaged 4.39 percent with an average 0.6 point, up slightly from last week when it averaged 4.34 percent.  A year ago at this time, the 15-year FRM averaged 4.52 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.10 percent this week, with an average 0.6 point, down from last week when it averaged 4.14 percent.  A year ago, the 5-year ARM averaged 4.92 percent.

The 1-year Treasury-indexed ARM averaged 4.05 percent this week with an average 0.6 point, down from last week when it averaged 4.20 percent.  At this time last year, the 1-year ARM averaged 4.75 percent.

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

“Interest rates for fixed mortgages rose this week following a run up in long-term bond yields, while ARM rates eased slightly,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “Rates on 30-year fixed loans were the highest since the starting week of this year.

“Home-price declines continue to moderate with more metropolitan areas showing stabilizing or rising values.  Compared with one year ago, house prices were down 0.7 percent in January 2010 in the S&P/Case-Shiller® 20-City Composite Index, which was the smallest 12-month decrease since January 2007.  Nine of the cities experienced positive growth, led by San Francisco’s 9.1 percent annual gain. Recently, the Mortgage Insurance Companies of America reported that homeowners who moved out of default outnumbered those who became newly delinquent in February, which was the first such occurrence since March 2006.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Summary of Survey Results

Fixed-Rate Mortgages
Average Conventional
30-Year Commitment Rate
Fees & Points Average Conventional
15-Year Commitment Rate
Fees & Points
US 5.08 0.7 4.39 0.6
Northeast 5.11 0.6 4.44 0.6
Southeast 5.06 0.7 4.39 0.7
N. Central 5.16 0.4 4.41 0.4
Southwest 5.02 0.6 4.36 0.6
West 5.04 0.9 4.35 0.8
Five/One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 4.10 0.6 2.75
Northeast 4.25 0.5 2.74
Southeast 3.84 0.6 2.75
N. Central 4.23 0.4 2.74
Southwest 4.14 0.5 2.76
West 4.04 0.7 2.75
One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 4.05 0.6 2.75
Northeast 3.92 0.5 2.73
Southeast 3.98 0.7 2.75
N. Central 4.30 0.2 2.73
Southwest 4.10 0.7 2.77
West 4.05 0.9 2.75

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. In general, the data presented were calculated from information collected Monday through Wednesday of the same week that the PMMS is released and may not reflect mortgage rates, fees or points currently available from any lender. Freddie Mac may change the methodology used to conduct the PMMS 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 December 17, 2009. The new weights use the dollar volume of conventional first-lien mortgage originations within the 1-unit Freddie Mac loan limit as reported under the Home Mortgage Disclosure Act (HMDA) for 2008. The weights are listed in the table below.

Freddie Mac Region PMMS Weights
Northeast 26.0
Southeast 16.7
North Central 15.9
Southwest 13.2
West 28.2


Primary Mortgage Market Survey Results
April 1, 2010

30-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 5.08 5.11 5.06 5.16 5.02 5.04
Fees & Points 0.7 0.6 0.7 0.4 0.6 0.9
15-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 4.39 4.44 4.39 4.41 4.36 4.35
Fees & Points 0.6 0.6 0.7 0.4 0.6 0.8
5/1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 4.10 4.25 3.84 4.23 4.14 4.04
Fees & Points 0.6 0.5 0.6 0.4 0.5 0.7
Margin 2.75 2.74 2.75 2.74 2.76 2.75
1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 4.05 3.92 3.98 4.30 4.10 4.05
Fees & Points 0.6 0.5 0.7 0.2 0.7 0.9
Margin 2.75 2.73 2.75 2.73 2.77 2.75

The National Mortgage Rate Snapshot
One Year Ago One Week Ago
30-YR 15-YR 5/1-YR 1-YR ARM 30-YR 15-YR 5/1-YR 1-YR ARM
Average 4.78 4.52 4.92 4.75 4.99 4.34 4.14 4.20
Fees & Points 0.7 0.7 0.7 0.6 0.6 0.6 0.6 0.6
Margin N/A N/A 2.74 2.76 N/A N/A 2.74 2.75