Mortgage Rates Decline

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Flooding, Tornados Affect Housing Market

Freddie Mac just released the results of its Primary Mortgage Market Survey® (PMMS®), which showed fixed-rate mortgages declining for the seventh consecutive week to new lows amid continuing weak economic and housing data. The 30-year fixed averaged 4.55 percent and the 15-year averaged 3.74 percent.

Last year at this time, the 30-year FRM averaged 4.79 percent, while the 15-year FRM averaged 4.20 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.41 percent this week, with an average 0.6 point, the same from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.94 percent.

1-year Treasury-indexed ARM averaged 3.13 percent this week with an average 0.6 point, up from last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 3.95 percent.

Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing, according to Frank Nothaft, vice president and chief economist for Freddie Mac. “The housing market is showing strain as well,” he notes.

The Case-Shiller® National Home Price Index fell 5.1 percent between the first quarters of 2010 and 2011, representing the largest annual decline since the third quarter of 2009. In addition, the index of pending existing home sales dropped 11.6 percent from March to April, led by the Midwest and South regions where the tornados and flooding occurred.

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