Freddie Mac: Rates start the year slightly lower than the conclusion of 2010

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.09 percent with an average 0.7 point for the week ending Jan. 7, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 5.01 percent. The 15-year FRM this week averaged 4.50 percent with an average 0.7 point, down from last week when it averaged 4.54 percent. A year ago at this time, the 15-year FRM averaged 4.62 percent. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, unchanged from last week when it averaged 4.44 percent. A year ago, the five-year ARM averaged 5.49 percent. The one-year Treasury-indexed ARM averaged 4.31 percent this week with an average 0.6 point, down from last week when it averaged 4.33 percent. At this time last year, the 1-year ARM averaged 4.95 percent. Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage. “Mortgage rates eased slightly this week after rising consecutively through December,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year. “As the economy strengthens further and the Federal Reserve (Fed) decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates. However, the federal funds futures market does not anticipate any Fed action until the second half of 2010.” For more information, visit www.freddiemac.com.