Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing that average fixed-rate mortgages (FRMs) fell following the Federal Reserve announcement that it will maintain its bond buying stimulus helping to keep homebuyer affordability elevated, hitting its lowest level since the week ending July 25, 2013. The 30-year FRM averaged 4.32 percent with an average 0.7 point for the week ending Sept. 26, 2013, down from last week when it averaged 4.50 percent. A year ago at this time, the 30-year FRM averaged 3.40 percent. Also this week, the 15-year FRM averaged 3.37 percent with an average 0.7 point, down from last week when it averaged 3.54 percent. A year ago at this time, the 15-year FRM averaged 2.73 percent.
"Mortgage rates fell following the Federal Reserve announcement that it will maintain its bond buying stimulus," said Frank Nothaft, vice president and chief economist, Freddie Mac. "These low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated. For instance, the S&P/Case-Shiller 20-city composite house price index rose 12.4 percent over the 12-months ending in July, which represented the largest annual increase since February 2006. In addition, more than half of the cities had annual growth exceeding 10 percent and four cities saw increases exceeding 20 percent."
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.07 percent this week with an average 0.5 point, down from last week when it averaged 3.11 percent. A year ago, the five-year ARM averaged 2.71 percent. 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 2.65 percent. At this time last year, the one-year ARM averaged 2.60 percent.
"These increases in home values have also increased homeowner wealth," said Nothaft. "For example, homeowners experienced an aggregate $1.4 trillion increase in equity in their homes over the first half of this year which contributed to the overall $4.2 trillion gain in household net worth."