23 August 2011
Freddie Mac (OTC: FMCC) recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates, fixed and adjustable, reaching all-time record lows providing further incentive for those homeowners looking to refinance. The 30-year fixed averaged 4.15 percent, breaking the previous record low of 4.17 percent set November 11, 2010.
According to the survey, 30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending August 18, 2011, down from the last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent.
Additionally, 15-year FRM averaged 3.36 percent with an average 0.6 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent.
Results also showed that the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08, with an average 0.5 point, down from the previous week when it averaged 3.13 percent. A year ago, the 5-year ARM averaged 3.56 percent.
The one-year Treasury-indexed ARM averaged 2.86 percent with an average 0.6 point, down from the last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.53 percent.
Frank Nothaft, vice president and chief economist, Freddie Mac, says, “The Federal Reserve’s policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows. For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011.
“Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter, according to Freddie Mac’s Quarterly Product Transition Report.”