Short-Term Rates Remain Mixed
© 2007 Freddie Mac
For Immediate Release
July 12, 2007
CONTACT: corprel@freddiemac.com
or (703) 903-3933
McLean, VA – 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 6.73 percent with an average 0.4 point for the week ending July 12, 2007, up from last week when it averaged 6.63 percent. Last year at this time, the 30-year FRM averaged 6.74 percent.
The 15-year FRM this week averaged 6.39 percent with an average 0.4 point, up from last week when it averaged 6.30 percent. A year ago, the 15-year FRM averaged 6.37 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.35 percent this week, with an average 0.5 point, up from last week when it averaged 6.29 percent. A year ago, the 5-year ARM averaged 6.33 percent.
One-year Treasury-indexed ARMs averaged 5.71 percent this week with an average 0.5 point, unchanged from last week. At this time last year, the 1-year ARM averaged 5.75 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“A favorable employment report for June and robust consumer credit growth for May pushed long-term mortgage rates higher in the past week, nearly eliminating the declines made in rates over the previous three weeks,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In addition, consumer credit jumped by $12.9 billion in May, almost double market expectations.
“Our July economic outlook forecasts 30-year fixed-rates to stay around their current level through the end of year. The refinance share of loan applications is expected to continue decreasing throughout the same time frame, averaging about 35 percent in 2007, the lowest level since 2000. Freddie Mac expects weakness in the housing market to persist in the second half of the year, with 2007 total home sales and housing starts hitting 5-year lows.”
Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than four million renters in America.
SUMMARY OF SURVEY RESULTS
| Fixed-Rate Mortgages | ||||
| Average Conventional 30-Year Commitment Rate | Fees & Points | Average Conventional 15-Year Commitment Rate | Fees & Points | |
| US | 6.73 | 0.4 | 6.39 | 0.4 |
| Northeast | 6.78 | 0.3 | 6.42 | 0.3 |
| Southeast | 6.65 | 0.6 | 6.34 | 0.5 |
| N. Central | 6.77 | 0.4 | 6.44 | 0.3 |
| Southwest | 6.69 | 0.5 | 6.37 | 0.4 |
| West | 6.73 | 0.6 | 6.39 | 0.6 |
| Five/One-Year Adjustable-Rate Mortgages | |||
| First Commitment Rate | Fees & Points | Margin | |
| US | 6.35 | 0.5 | 2.77 |
| Northeast | 6.30 | 0.5 | 2.80 |
| Southeast | 6.35 | 0.6 | 2.75 |
| N. Central | 6.48 | 0.5 | 2.76 |
| Southwest | 6.34 | 0.5 | 2.77 |
| West | 6.33 | 0.6 | 2.75 |
| One-Year Adjustable-Rate Mortgages | |||
| First Commitment Rate | Fees & Points | Margin | |
| US | 5.71 | 0.5 | 2.75 |
| Northeast | 5.74 | 0.5 | 2.77 |
| Southeast | 5.73 | 0.7 | 2.75 |
| N. Central | 5.80 | 0.4 | 2.75 |
| Southwest | 5.75 | 0.5 | 2.79 |
| West | 5.63 | 0.4 | 2.72 |
Freddie Mac defines its regions as follows:
Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, PR, ME, NH, VT, MA, RI, CT, VI
Southeast: NC, SC, TN, KY, GA, AL, FL, MS
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. Freddie Mac may change the methodology used to conduct the PMMS survey 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 October 26, 2006. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under Home Mortgage Disclosure Act (HMDA) for 2005. The weights are listed in the table below.
| Freddie Mac Region | PMMS Weights |
| Northeast | 24.5 |
| Southeast | 18.6 |
| North Central | 15.4 |
| Southwest | 10.4 |
| West | 31.0 |
PRIMARY MORTGAGE MARKET SURVEY RESULTS
July 12, 2007
| 30-Year Fixed Rate Mortgages | ||||||
| US | NE | SE | NC | SW | W | |
| Average | 6.73 | 6.78 | 6.65 | 6.77 | 6.69 | 6.73 |
| Fees & Points | 0.4 | 0.3 | 0.6 | 0.4 | 0.5 | 0.6 |
| 15-Year Fixed Rate Mortgages | ||||||
| US | NE | SE | NC | SW | W | |
| Average | 6.39 | 6.42 | 6.34 | 6.44 | 6.37 | 6.39 |
| Fees & Points | 0.4 | 0.3 | 0.5 | 0.3 | 0.4 | 0.6 |
| 5/1-Year Adjustable Rate Mortgages | ||||||
| US | NE | SE | NC | SW | W | |
| Average | 6.35 | 6.30 | 6.35 | 6.48 | 6.34 | 6.33 |
| Fees & Points | 0.5 | 0.5 | 0.6 | 0.5 | 0.5 | 0.6 |
| 1-Year Adjustable Rate Mortgages | ||||||
| US | NE | SE | NC | SW | W | |
| Average | 5.71 | 5.74 | 5.73 | 5.80 | 5.75 | 5.63 |
| Fees & Points | 0.5 | 0.5 | 0.7 | 0.4 | 0.5 | 0.4 |
| 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 | 6.74 | 6.37 | 6.33 | 5.75 | 6.63 | 6.30 | 6.29 | 5.71 |
| Fees & Points | 0.6 | 0.4 | 0.5 | 0.6 | 0.4 | 0.4 | 0.4 | 0.4 |
| © 2007 Freddie Mac |
