Freddie Mac – 30 Year Mortgage Rates Still Below 5.00

Freddie Mac, the government controlled agency that buys mortgages from lenders, just released its weekly Primary Mortgage Market Survey (PMMS) that shows mortgage rates increasing for the week ending October 15, 2009. The increase in mortgage interest rates was in all four mortgage products that Freddie reports on in the survey.

Mortgage Rates

The average 30 year mortgage rate increased to 4.92 percent with an average discount point of 0.7, up from the prior week’s average 30 year rate of 4.87 percent. Even with this week’s increase, 30 year mortgage rates have been below 5.00 percent for three consecutive weeks. A year ago this time 30 year mortgage interest rates were averaging 6.46 percent.

15 year mortgage rates are averaging 4.37 percent with average discount points at 0.7,  up from the previous week’s average 15 year mortgage rate of 4.33 percent. Last week’s 4.33 percent was a record low for 15 year rates since Freddie started tracking it in 1991. A year ago, 15 year interest rates were over 6.00 percent at 6.14 percent.

5/1 Treasury indexed adjustable mortgage rates increased to 4.38 percent this week, with an average discount points of 0.6, up from last week’s average 5/1 adjustable mortgage rate of 4.35 percent. The prior week’s rate of 4.35 percent was the lowest since Freddie started tracking it in 2005.

One year Treasury indexed adjustable rate mortgages increased to 4.60 percent, with average discount points at 0.5, up from the prior week’s average mortgage rate of 4.53 percent. Last year at this time rates on a one year ARM were at 5.16 percent.

Frank Nothaft, Freddie Mac’s vice president and chief economist had the following comments in this week’s PMMS.

Mortgage rates rose slightly over the week, but rates on 30-year fixed mortgages remained below 5 percent for the third consecutive week.  Homeowners are taking advantage of these low rates to refinance their current balances.  Over the past five weeks ending October 9, more than 3 out 5 mortgage applications were for refinancing, according the Mortgage Bankers Association.

The outlook on economic growth in the second half of this year has improved over the past few months.  At its September 22-23 monetary policy meetings, the Federal Reserve increased its forecast for real GDP growth from the last meeting in mid-August.  They noted that data from the housing sector indicated that a gradual recovery in activity was under way. The modest strengthening came about, in part, to improvements in housing affordability stemming from low interest rates for conforming loans and a lower level of house prices.

Freddie Mac’s survey only reports on conforming mortgage rates, mortgages it buys from lenders. Monitorbankrates.com reported on jumbo rate mortgages earlier this week.  Following is that report:

Jumbo Mortgage Rates

• 30-year jumbo mortgage rates were down slightly this week over last.  Current jumbo mortgage rates are at 5.83%, down from last week’s average rate of 5.84%.
• Average 15 year jumbo rate mortgages are at 5.44% this week, down from the previous week’s rate of 5.50 percent.

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