Long-term Mortgage Rates Drop To Levels Last Seen In Mid-July 2005
September 2, 2005
Rising Energy Costs Continue To Make Financial Markets Cautious
McLean, VA – The results of the Freddie Mac (NYSE:FRE) Primary Mortgage Market SurveySM (PMMSSM) found that the 30-year fixed-rate mortgage (FRM) averaged 5.71 percent, with an average 0.6 point, for the week ending September 1, 2005, down from last week when it averaged 5.77 percent. Last year at this time, the 30-year FRM averaged 5.77 percent.
The average for the 15-year FRM this week is 5.32 percent, with an average 0.5 point, down from last week when it averaged 5.35 percent. A year ago, the 15-year FRM averaged 5.15 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.30 percent this week, with an average 0.6 point, unchanged from last week when it averaged 5.30 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 4.48 percent this week, with an average 0.7 point, down from last week when it averaged 4.56 percent. At this time last year, the one-year ARM averaged 3.97 percent.
"Market jitters about high energy costs and the spill over into other sectors of the economy have led to a decline in bond yields, which typically means lower mortgage rates," said Frank Nothaft, vice president and chief economist at Freddie Mac. "And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates.
"As if all that wasn't enough, the devastation caused by Hurricane Katrina and the echo effects on future energy prices in the US may mean that mortgage rates will fall even further in the coming days ahead."
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Source: Freddie Mac