"Soft Housing Market" Does Little to Impact Rates in Latest Freddie Mac Survey

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), which shows mortgage rates mixed but holding steady for the second week with the 30-year fixed-rate mortgage (FRM) matching last week's 4.50 percent average, with an average 0.8 point for the week ending June 23, 2011. Last year at this time, the 30-year FRM averaged 4.69 percent. The 15-year FRM averaged 3.69 percent this week, with an average 0.7 point, up from last week when it averaged 3.67 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent. "Mortgage rates were virtually unchanged this week amid further indications of a soft housing market," said Frank Nothaft, VP and chief economist for Freddie Mac. "Although new construction on single-family homes ticked up in May from April, it was still below the overall pace set in 2010. Moreover, existing home sales fell 3.8 percent in May to the fewest since November 2010." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.25 percent this week, with an average 0.6 point, down from last week when it averaged 3.27 percent. A year ago, the five-year ARM averaged 3.84 percent. The one-year Treasury-indexed ARM averaged 2.99 percent this week with an average 0.5 point, up from last week when it averaged 2.97 percent. At this time last year, the one-year ARM averaged 3.77 percent. "The Federal Reserve also reiterated that the housing sector continues to be depressed in its June 22 policy committee statement," said Nothaft. "The S&P/Case-Shiller National Home Price Index fell 2.1 percent between the fourth quarter of 2010 and first quarter 2011. Based on a recent survey by MarcoMarkets of 108 professional forecasters taken in early June, the index is predicted to decline another 1.5 percent by the fourth quarter of this year."