Low Inflation Translates Into Low Mortgage Rates

March 26, 2004

One-Year ARM Slips For The Seventh Week

McLean, VA – In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.40 percent, with an average 0.7 point, for the week ending March 25, 2004, up slightly from last week when it averaged 5.38 percent. Last year at this time, the 30-year FRM averaged 5.91 percent.

The average for the 15-year FRM this week is 4.70 percent, with an average 0.7 point, almost unchanged from last week when it averaged 4.69 percent. A year ago, the 15-year FRM averaged 5.21 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.36 percent this week, with an average 0.6 point, down from 3.39 percent last week. At this time last year, the one-year ARM averaged 3.84 percent. This is, again, the lowest the one-year ARM has been since Freddie Mac began tracking those figures in January 1984.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Low mortgage rates continue to fuel the housing market, making homeownership more attainable to a broader segment of families," said Frank Nothaft, Freddie Mac chief economist. "As evidence of this, we have seen mortgage applications rise for the last two months and home sales have picked up speed. And with the weather getting better, we should see housing sales strengthen even more in the near term.

"As long as general inflation remains in check, we expect mortgage rates will stay in their current range, and that will leave open the window of opportunity for refinancers and potential home buyers." The National Mortgage Rate Snapshop This Week One Week Ago One Year Ago 30-Yr 15-Yr 1-Yr ARM 5.40

4.70 3.36 0.7 0.7 0.6 30-Yr 15-Yr 1-Yr ARM 5.38

4.69 3.39 0.7 0.7 0.6 30-Yr 15-Yr 1-Yr ARM 5.91 5.21 3.84 0.6

0.6 0.6

Source: Freddie Mac

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