Continuing Low Rates Push April Home Sales To All Time Record High Levels
May 27, 2005
Housing Remains Strong Part Of The National Economy
McLean, VA – Freddie Mac (NYSE:FRE) released the results of its Primary Mortgage Market SurveySM (PMMSSM) in which the 30-year fixed-rate mortgage (FRM) averaged 5.65 percent, with an average 0.6 point, for the week ending May 26, 2005, down from last week when it averaged 5.71 percent. Last year at this time, the 30-year FRM averaged 6.32 percent.
The average for the 15-year FRM this week is 5.21 percent, with an average 0.6 point, also down from last week when it averaged 5.27 percent. A year ago, the 15-year FRM averaged 5.69 percent.
Five-Year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.07 percent this week, with an average 0.7 point, unchanged from last week. 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 adjustable-rate mortgages (ARMs) averaged 4.21 percent this week, with an average 0.7 point, down from last week when it averaged 4.26 percent. At this time last year, the one-year ARM averaged 3.87 percent.
"Release of the May Federal Open Market Committee (FOMC) minutes the week reinforced the notion that inflation in the economy in the first three months of the year was contained and upward price pressure in the near-term seems unlikely," said Frank Nothaft, Freddie Mac vice president and chief economist. "And when inflation is contained, mortgage rates decline.
"Housing continued to help fuel the economy this year, accounting for about 20 percent of real GDP growth in the first quarter alone. Further, since the end of March long-term bond yields have fallen by more than a half of a percentage point, allowing interest rates on fixed-rate mortgage to decline as well. Consequently, both new and existing home sales in April reached all-time record highs."
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Source: Freddie Mac