Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates dropping from the previous week as the Federal Reserve's bond purchase program continues to drive market speculation. The 30-year fixed-rate mortgage (FRM) averaged 4.51 percent with an average 0.7 point for the week ending Aug. 29, 2013, down from last week when it averaged 4.58 percent. Last year at this time, the 30-year FRM averaged 3.59 percent. Also this week, the 15-year FRM averaged 3.54 percent with an average 0.7 point, down from last week when it averaged 3.60 percent. A year ago at this time, the 15-year FRM averaged 2.86 percent.
"The Fed is monitoring the housing market closely after the run up in mortgage rates over the past few months," said Frank Nothaft, vice president and chief economist, Freddie Mac. "The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week."
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.24 percent this week with an average 0.5 point, up from last week when it averaged 3.21 percent. A year ago, the five-year ARM averaged 2.78 percent. The one-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.4 point, up from last week when it averaged 2.67 percent. At this time last year, the one-year ARM averaged 2.63 percent.