Fixed Rates Trend Downward as Spring Homebuying Season Begins

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates reversing course from the previous week and heading lower with the start of the spring homebuying season. This week, the 30-year fixed-rate mortgage (FRM) averaged 3.54 percent with an average 0.8 point for the week ending March 21, 2013, down from last week when it averaged 3.63 percent. Last year at this time, the 30-year FRM averaged 4.08 percent. Also this week, the 15-year FRM averaged 2.72 percent with an average 0.7 point, down from last week when it averaged 2.79 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent. "Low and stable inflation is placing downward pressure on fixed mortgage rates. Annual growth in the consumer price index has remained at or below two percent for the past four months, and for the producer price index even lower," said Frank Nothaft, vice president and chief economist, Freddie Mac. "This, in part, is why the Federal Reserve monetary policy committee on March 20th lowered the upper end of its inflation forecast for 2013. In addition, our March Outlook calls for 30-year fixed mortgage rates to remain below 4 percent throughout this year." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.61 percent this week with an average 0.6 point, the same as last week. A year ago, the five-year ARM averaged 2.96 percent. Also this week, the one-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.4 point, down from last week when it averaged 2.64 percent. At this time last year, the one-year ARM averaged 2.84 percent.