Mortgage Rates Inch Lower as Construction Market Heats Up

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing fixed mortgage rates edging slightly lower, as the 30-year fixed-rate mortgage (FRM) averaged 3.37 percent with an average 0.7 point for the week ending Oct. 18, 2012, down from last week when it averaged 3.39 percent. Last year at this time, the 30-year FRM averaged 4.11 percent.  Also this week, the 15-year FRM averaged 2.66 percent with an average 0.6 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent. "Mortgage rates remained more or less unchanged this week as home construction builds up steam," said Frank Nothaft, vice president and chief economist of Freddie Mac. "Construction on single-family homes jumped to an annualized rate of 11 percent in August, the strongest pace since August 2008. Over the first nine months of the year, single-family starts were 23 percent higher than the same period last year. Moreover, homebuilder confidence rose for the sixth consecutive month in October to the highest level since June 2006, according to the NAHB/Wells Fargo Housing Market Index." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.75 percent this week with an average 0.6 point, up from last week when it averaged 2.73 percent. A year ago, the five-year ARM averaged 3.01 percent. The one-year Treasury-indexed ARM averaged 2.60 percent this week with an average 0.4 point, up from last week when it averaged 2.59 percent. last week. At this time last year, the one-year ARM averaged 2.94 percent.