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Inflation Concerns Ease As Do Mortgage Rates

July 31, 2008

Rates eased down slightly according to Freddie Mac's Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage (FRM) averaged 6.52 percent with an average 0.7 point for the week ending July 31, 2008, down from last week when it averaged 6.63 percent. Last year at this time, the 30-year FRM averaged 6.68 percent.

The 15-year FRM this week averaged 6.07 percent with an average 0.6 point, down from last week when it averaged 6.18 percent. A year ago at this time, the 15-year FRM averaged 6.32 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.07 percent this week, with an average 0.6 point, down from last week when it averaged 6.16 percent. A year ago, the 5-year ARM averaged 6.29 percent.

One-year Treasury-indexed ARMs averaged 5.27 percent this week with an average 0.6 point, down from last week when it averaged 5.49 percent. At this time last year, the 1-year ARM averaged 5.59 percent.

"Mortgage rates moved lower this week as a drop in commodity prices eased market concerns over inflation pressures," said Frank Nothaft, Freddie Mac vice president and chief economist. "For instance, the Department of Energy reported that gasoline prices were the lowest since the end of May, and oil prices were at levels not seen since early May."

"Meanwhile, there were mixed reports this week on the state of the U.S. housing market. While the months of supply for existing single-family homes for sale rose to 11 months in June, the supply of new homes fell for the second consecutive month to 7 months. Further, the seasonally-adjusted U.S. homeownership rose slightly from 68.0 percent in the first quarter of this year to 68.1 percent in the second, yet still below the 68.3 percent set in the second quarter of 2007."

The National Mortgage Rate Snapshop
This Week One Week Ago One Year Ago
30-Yr 15-Yr 5-Yr
1-Yr ARM
6.52 6.07 6.07 5.27
0.7 0.6 0.6 0.6
30-Yr 15-Yr 5-Yr
1-Yr ARM
6.63 6.18 6.16 5.49
0.6 0.6 0.7 0.5
30-Yr 15-Yr 5-Yr
1-Yr ARM
6.68 6.32 6.29 5.59
0.3 0.3 0.5 0.5

Source: Freddie Mac

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