Long-term rates slip on weak economic news: Short-term rates pick up on hints of the end to rate cutsMortgagePress.comPrimary Mortgage Market Survey, fixed rate mortgage, ARMs,
Freddie Mac has released the results of its Primary Mortgage
Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM)
averaged 5.98 percent with an average 0.5 point for the week ending
May 22, 2008, down from last week when it averaged 6.01 percent.
Last year at this time, the 30-year FRM averaged 6.37 percent.
The 15-year FRM this week averaged 5.55 percent with an average
0.6 point, down from last week when it averaged 5.60 percent. A
year ago at this time, the 15-year FRM averaged 6.06 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
(ARMs) averaged 5.61 percent this week, with an average 0.6 point,
up from last week when it averaged 5.57 percent. A year ago, the
five-year ARM averaged 6.02 percent.
One-year Treasury-indexed ARMs averaged 5.24 percent this week
with an average 0.6 point, up from last week when it was 5.18
percent. At this time last year, the 1-year ARM averaged 5.64
percent. Average commitment rates should be reported along with
average fees and points to reflect the total cost of obtaining the
"Interest rates for fixed-rate mortgages fell slightly this week
on news of both weaker industrial production in April and consumer
sentiment falling in May to its lowest level since June 1980," said
Frank Nothaft, Freddie Mac vice president and chief economist. "ARM
rates, however, rose slightly on market forecasts that the Federal
Reserve (Fed) may not pursue any more rate cuts over the near term.
For instance, the federal funds futures market suggests virtually
no change in monetary policy over the next few months and the Fed
viewed the last rate cut to be a 'close call,' according to the
minutes of its most recent policy Committee meeting.
"Housing woes still plague the economy. Although housing starts
unexpectedly rose in April, all of the gains were in multifamily
properties. New construction on one-unit homes fell to 692,000
homes (annualized), which was the least since January 1991 and
almost 62 percent below the peak set in November 2005. In addition,
homebuilder confidence matched an all-time record low in May."
For more information, visit www.freddiemac.com.