MCLEAN, Va., June 30, 2011 /PRNewswire/ -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows fixed mortgage rates holding steady amid mixed economic reports and some signs of improvement in the housing market. The 5-year adjustable-rate mortgage hit a new record low at 3.22 percent, dropping below the previous record of 3.25 percent set November 11, 2010.
News Facts
- 30-year fixed-rate mortgage (FRM) averaged 4.51 percent with an average 0.7 point for the week ending June 30, 2011, up from last week when it averaged 4.50 percent. Last year at this time, the 30-year FRM averaged 4.58 percent.
- 15-year FRM this week averaged 3.69 percent with an average 0.7 point, the same from last week when it averaged 3.69 percent. A year ago at this time, the 15-year FRM averaged 4.04 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.22 percent this week, with an average 0.6 point, down from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 3.79 percent.
- 1-year Treasury-indexed ARM averaged 2.97 percent this week with an average 0.6 point, down from last week when it averaged 2.99 percent. At this time last year, the 1-year ARM averaged 3.80 percent.
Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions.
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
- "Interest rates on 30-year fixed mortgages hovered around 4.5 percent for the fourth consecutive week following mixed reports on the strength of the economy. First quarter economic growth was revised up in the final estimate, but growth in consumer spending stagnated in May while April's figure was revised downward; consumer expenditures account for roughly two-thirds of the nation's gross domestic product.
- "Meanwhile, there were some signs of improvement in the housing market. In April, the S&P/Case-Shiller® 20-city composite home price index rose 0.7 percent, representing the first monthly increase since July 2010. However, much of the improvement reflected the seasonal increase in homebuying over the spring-summer period. Pending existing home sales rebounded in May, exhibiting the largest monthly increase since November 2010."
Economic Update
The National Association of Realtors estimated sales of existing-homes for the month of May were estimated to be at a seasonally adjusted annual rate of 4.81 million units, in line with analysts' expectations, but down from April's 5.0 million pace and hitting a six-month low. May's sales rate is off -15.3% from a year ago (it should be noted that one year ago the home buyer tax credit was nearing expiration). The median existing-home price for housing of all types was $166,500 in May, a drop of -4.6% from a year back. Total housing inventory at the end of May was estimated at 3.72 million units translating to a nine-month supply at May's sales pace (a six month high).In May, U.S. housing starts increased +3.5% from April to a seasonally adjusted annual rate of 560,000 units. When compared against May 2010, housing starts were down -3.4%. Single-family homes, which account for about two-thirds of all new home construction, rose by +3.7% May over April. The number of new homes under construction during May was at the lowest level with records dating back to 1970.
A bright spot! The number of building permits issued across the country jumped +8.7% from a month earlier to 612,000, the highest level since December.
Consumer prices rose a greater-than-expected +0.2% in May despite lower gasoline costs. On an annualized pace, consumer prices have increased +3.6%.
Wholesale prices slowed in May but are still up +7.3% from a year ago. The Producer Price Index for finished goods climbed only +0.2% in May, its smallest gain in 10 months, but its +7.3% annualized rate is twice that of the consumer rate indicating that companies are still delaying price increases meaning lower margins (profits) for producers and naturally less demand for additional staff.
The National Federation of Independent Business reported that its small-business optimism index fell -0.3 points in May to 90.9, the third straight decline and well below normal. One in four businesses cited weak sales as their top problem.
The Reuters/University of Michigan sentiment index for the month of June sank 2.5 points to 71.8, a bigger drop than expected. Weak hiring and rising costs for other goods and services are weighing people's minds. Consumer spending accounts for roughly 70% of U.S. economic output ranging from clothing items to vehicles and homes.
Sources: National Realtor Association, National Association of Home Builders, US Department of Commerce, National Federation of Independent Business, Reuters
November 30, 2010 ~ What Happened to Mortgage Rates??
After reaching the lowest levels in decades (or history), mortgage rates have shot higher over the past almost four weeks now. There is not a simple explanation for why this happened, but looking at the many factors which are influencing mortgage rates right now will help to understand what's going on. In short, when investors look ahead, they see few reasons for mortgage rates to move lower and many possible causes for them to move higher. The major negatives for mortgage rates include stronger than expected economic growth, domestic and foreign opposition to quantitative easing, and concerns about lower foreign demand for US securities.
Beginning in late August, the Fed hinted that they would initiate a new stimulus program to purchase Treasury securities, which is known as quantitative easing. In the short-term, Treasury buying by the Fed increases demand for bonds, including mortgage-backed securities (MBS). In anticipation of this added demand, investors purchased MBS, which pushed mortgage rates lower.
After the Fed's official announcement on November 3, mortgage rates began to move higher for a variety of reasons. Stronger than expected economic data caused investors to raise their outlook for economic growth, which generally leads to higher inflation. In addition, there was substantial opposition to the quantitative easing program from other countries and from many US politicians and economists, meaning that the Fed will face strong resistance to an expansion of the program. Investors had viewed the $600 billion initial level as a first step which would likely be increased in the future. Stronger economic growth and opposition to quantitative easing has reduced the likelihood that the program will be increased.
The recent news has not been uniformly negative for mortgage rates. Current inflation levels remain extremely low. In fact, the Consumer Price Index data released this week showed that annual core inflation dropped to a record low in October. Bottom line, though, when mortgage rates reached such extremely low levels, it left them in a position to reverse direction very quickly.
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February 4, 2010
River Edge, NJ – Approved Funding Corp's (AFC) President Shmuel Shayowitz, has sent out notices to past and current client & Business Professionals today, stating that there hasn't been a better time to buy or refinance a home in many years. "The current tumultuous housing market presents an enormous opportunity for potential home buyers", Mr. Shayowitz wrote. "Sellers are willing to discuss and deal on any genuine offer knowing the current market, and the low rates are an added incentive to close sooner than later for buyers. We continue to see movement and loan locks from potential homebuyers and current home-owners alike".
Mr. Shayowitz added that with the many Investors and mortgage products & programs AFC has, they are able to lend to many individuals even in this "credit frenzy & quality conscious" market. "Thankfully we are positioned extremely well to assist homeowners and potential homeowners. Approved Funding as a Mortgage Banker/Lender, has many products & programs to offer, unlike a Bank which have just their programs".
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