Mortgage Rates Mostly Lower

The Wall Street Journal

24 December 2010

Mortgage rates mostly eased in the latest week, although the change was minimal following significant increases over the prior several weeks, according to Freddie Mac’s weekly survey of mortgage rates.

Rates have climbed in recent weeks after they fell through October, setting repeated all-time lows. Yields on Treasurys have jumped sharply recently and mortgage rates generally track the yields, which move inversely to Treasury prices.

“Economic reports in December have suggested the economy began regaining momentum towards the end of the year, with consumer spending, industrial production and exports all posting solid gains,” said Freddie Chief Economist Frank Nothaft.

The 30-year fixed-rate mortgage averaged 4.81% for the week ended Thursday, down from the prior week’s 4.83%. Rates on 15-year fixed-rate mortgages were 4.15%, down from 4.17% the prior week.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.75%, down from the prior week’s 3.77%. One-year Treasury-indexed ARMs were 3.4%, up from 3.35% the prior week but down from 4.38% a year earlier.

To obtain the rates, the mortgages required payment of an average 0.7 point, with the exception of the five-year Treasury-indexed ARMs, which required payment of an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.