Freddie Mac survey finds rates drop to lowest level in six weeks

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged five percent with an average 0.7 point for the week ending May 6, 2010, down from last week when it averaged 5.06 percent. Last year at this time, the 30-year FRM averaged 4.84 percent. The 15-year FRM this week averaged 4.36 percent with an average 0.7 point, down from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.51 percent. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, down from last week when it averaged four percent. A year ago, the five-year ARM averaged 4.90 percent. The one-year Treasury-indexed ARM averaged 4.07 percent this week with an average 0.6 point, down from last week when it averaged 4.25 percent. At this time last year, the one-year ARM averaged 4.78 percent. Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage. “Treasury bond and note yields declined this week, and rates on fixed-rate mortgages and hybrid ARMs followed suit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for both the 30-year and 15-year fixed-rate mortgages were the lowest in six weeks; initial rates on 5/1 hybrid ARMs hit an all-time low since they were added to the survey in the beginning of 2005. The homebuyer tax credit helped support home sales in March, and anecdotal reports point to strong April sales as well. Pending existing home sales rose for the second consecutive month in March to the strongest pace since October 2009, just before the original deadline for the credit, based on figures published by the National Association of Realtors. Three of the four Census regions showed an uptick in sales, led by the South with a 12.7 percent gain, while sales in the Northeast fell 3.3 percent. To receive the federal tax credit, homebuyers had to sign contracts by April 30th and settle by June 30th of this year.” For more information, visit www.freddiemac.com.