Second quarter GDP release results in fixed rates dipping to record lows
Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), with the 30-year and 15-year fixed-rate mortgages reaching a record low of 4.49 percent for this survey. The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991. The five-year adjustable-rate mortgage (ARM) also reached its lowest level since Freddie Mac began tracking it in 2005 at 3.63 percent. The 30-year fixed-rate mortgage (FRM) averaged 4.49 percent with an average 0.7 point for the week ending Aug. 5, 2010, down from last week's count when it averaged 4.54 percent. At this time last year, the 30-year FRM averaged 5.22 percent. The 15-year FRM averaged a record low of 3.95 percent, with an average 0.6 point, down from the previous week when it averaged four percent. A year ago at this time, the 15-year FRM averaged 4.63 percent. “And yet again, interest rates for fixed-rate mortgages and now the hybrid five-year ARM fell to all-time record lows this week following the second quarter GDP release," said Frank Nothaft, vice president and chief economist for Freddie Mac. "Annual revisions cut the cumulative GDP growth in half over the past three years ending in the first quarter of 2010 from 1.4 percent to 0.6 percent. This reduces inflationary pressures and allows longer-term rates room to ease." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.63 percent this week, with an average 0.6 point, down from last week when it averaged 3.76 percent. A year ago, the five-year ARM averaged 4.73 percent. The one-year Treasury-indexed ARM averaged 3.55 percent this week with an average 0.7 point, down from last week when it averaged 3.64 percent. At this time last year, the 1-year ARM averaged 4.78 percent. “More recently, housing investment picked up in the second quarter of this year as the homebuyer tax credit spurred new and existing sales and low mortgage rates encouraged remodeling," said Nothaft. "Fixed residential investment added 0.6 percentage points to second quarter real GDP growth following two quarters of decline.” For more information, visit www.freddiemac.com.