Freddie Mac's Weekly Primary Mortgage Market Survey

Here are the results of Freddie Mac's most recent, weekly primary mortgage market survey for the week of May 20th - May 26th, 2005:

• 30 year fixed rate mortgage: 5.65% (0.60 points)
• 15 year fiexd rate mortgage: 5.21% (0.60 points)
• 5/1 year adjustable rate mortgage (ARM): 5.07% (0.70 points)
• 1 year adjustable rate mortgage (ARM): 4.21% (0.70 points)

At this time last year, the 30-year fixed-rate mortgage (FRM) averaged 6.32 percent, with an average of 0.6 points.

The average for the 15-year FRM this week is 5.21 percent, with an average 0.6 point, also down from last week when it averaged 5.27 percent. A year ago, the 15-year FRM averaged 5.69 percent.

Five-Year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.07 percent this week, with an average 0.7 point, unchanged from last week. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.21 percent this week, with an average 0.7 point, down from last week when it averaged 4.26 percent. At this time last year, the one-year ARM averaged 3.87 percent.

Each week, Freddie Mac surveys lenders across the nation to determine the average 30-year fixed-rate mortgage rate; 15-year fixed-rate mortgage rate; 5/1 hybrid ARM; and 1-year ARM. Currently, 125 lenders are surveyed each week and the mix of lender types – thrifts, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide.

US home values still climbing

A recent report by the National Association of Realtors (NAR) revealed that sales of existing U.S. homes grew a substantial 4.5% to a record high in April, with home prices generating the largest annual gain in almost 25 years. Furthermore, the NAR reported that the national median home price rose 15.1% in April (as compared to the same month in 2004) to $206,000. This substantial price increase was the largest since November 1980.

According to the government's Census Bureau, since 2000, the number of homes across the country valued at $1 million or more has nearly doubled. Government research now estimates that one percent of all American homes are now worth over the $1-million threshold. California has the highest concentration of million-dollar homes, followed by Connecticut, the District of Columbia, Massachusetts, and New York.

Freddie Mac's Weekly Primary Mortgage Market Survey

Today, Freddie Mac released the results of its weekly primary mortgage market survey. Each week, Freddie Mac surveys lenders across the nation to determine the average 30-year fixed-rate mortgage rate; 15-year fixed-rate mortgage rate; 5/1 hybrid ARM; and 1-year ARM. Currently, 125 lenders are surveyed each week and the mix of lender types – thrifts, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide. Here is a summary of the results (nationwide) found for the week of April 29th - May 5th, 2005:

• 30 year fixed rate mortgage: 5.75% (0.60 points)
• 15 year fiexd rate mortgage: 5.31% (0.60 points)
• 5/1 year adjustable rate mortgage (ARM): 5.16% (0.60 points)
• 1 year adjustable rate mortgage (ARM): 4.22% (0.70 points)

This past week, the 30-year fixed-rate mortgage (FRM) averaged 5.75 percent, with an average of 0.6 points, down from last week when it averaged 5.78 percent. Last year at this time, the 30-year FRM averaged 6.12 percent.

The average for the 15-year FRM this week is 5.31 percent, with an average of 0.6 points, down from last week when it averaged 5.33 percent. A year ago, the 15-year FRM averaged 5.47 percent.

Five-Year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.16 percent this week, with an average of 0.6 points, down from 5.20 last week.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.22 percent this week, with an average of 0.7 points, up very slightly from last week when it averaged 4.21 percent. At this time last year, the one-year ARM averaged 3.76 percent.

another Fed rate increase

Yesterday, the Federal Reserve raised interest rates again for the eighth consecutive time. The Federal Funds Rate is now at 3%, up from just 1% last year. This is the rate which banks borrow from. The last time this was higher was back in October 2001.

The Fed said yesterday that it looks to continue on its "measured path" of increases, which will likely mean a Fed rate of 4% by the end of this year.

The Fed also noted that U.S. consumer spending has slowed, oil and gas prices have risen, and inflation is a concern.

Here a some interesting & related facts:

• Despite the Fed's consistent rate increases, the 30-year fixed mortgage rate has actually gone down since April 29. According to Freddie Mac, the average 30-year fixed mortgage is currently at 5.78% (with 0.60 points). Compare that to 6.25% when the Fed started raising rates in June 2004.
• Nearly 1/3 of all new mortgages (in the US) are interest-only mortgages. In states like California, Nevada, and Virginia where property values have nearly trippled in the past 5 years, about about half of all new mortgages are interest only.