Mortgage Rates Creep Up Again According To Freddie Mac Weekly Survey
August 5, 2005
McLean, VA –The Freddie Mac (NYSE:FRE) Primary Mortgage Market Survey (PMMS) found the 30-year fixed-rate mortgage (FRM) averaged 5.82 percent, with an average 0.6 point, for the week ending August 4, 2005, up from last week when it averaged 5.77 percent. Last year at this time, the 30-year FRM averaged 5.99 percent.
The average for the 15-year FRM this week is 5.38 percent, with an average 0.6 point, up from last week when it averaged 5.34 percent. A year ago, the 15-year FRM averaged 5.40 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.30 percent this week, with an average 0.7 point, up slightly from last week when it averaged 5.27 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.
One-year Treasury-indexed ARMs averaged 4.47 percent this week, with an average 0.7 point, up from last week when it averaged 4.46 percent. At this time last year, the one-year ARM averaged 4.08 percent.
"Long-term mortgage rates will more than likely rise over the next few months, albeit modestly compared to shorter-term rates," said Frank Nothaft, vice president and chief economist at Freddie Mac. "As the Federal Reserve (Fed) increases its targeted overnight-lending rate, home-equity loans will become more costly. This is because many home-equity loans are tied to the prime rate, which generally follows every Fed rate hike. Currently, the prime rate is 6.25 percent and is expected by many to rise to 6.50 percent next week."
Nothaft added, "Homeowners wanting to tap into recent gains in home values have turned to a refinancing option, whereby they can extract a portion of the home equity they built over the years. Just in the second quarter of 2005, approximately 74 percent of refinancing comprised of homeowners taking out a new loan balance of 5 percent or more, most of which had an interest rate below today’s prime rate."
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Source: Freddie Mac
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