Year Begins With Rates Continuing to Slide

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing the average fixed-rate mortgage (FRM) starting 2015 by diving amid sliding bond yields to their lowest level since May 23, 2013, when the 30-year FRM averaged 3.59 percent. This week, the 30-year FRM averaged 3.73 percent, with an average 0.6 point for the week ending Jan. 8, 2014, down from last week when it averaged 3.87 percent. A year ago at this time, the 30-year FRM averaged 4.51 percent. Also this week, the 15-year FRM averaged 3.05 percent, with an average 0.5 point, down from last week when it averaged 3.15 percent. A year ago at this time, the 15-year FRM averaged 3.56 percent. 

"Mortgage rates fell to begin the year as 10-year Treasury yields slid beneath two percent for the first time in three months," said Frank Nothaft, vice president and chief economist, Freddie Mac. "Meanwhile, the Fed minutes indicated ongoing discussion regarding the timing of the first rate hike. Of the few economic releases this week, ADP Research Institute reports the private sector added an estimated 241,000 jobs in December, which exceeded market expectations and followed an upward revision of 19,000 jobs in November."

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.98 percent this week, with an average 0.5 point, down from last week when it averaged 3.01 percent. A year ago, the five-year ARM averaged 3.15 percent. The one-year Treasury-indexed ARM averaged 2.39 percent this week with an average 0.4 point, down from last week when it averaged 2.40 percent. At this time last year, the one-year ARM averaged 2.56 percent.