Gradual Rising Rates Will Help Cool Housing Market In The Future
September 23, 2005
2005 Still On Track To Be A Record Year For Housing Sales And Starts
McLean, VA – Freddie Mac's (NYSE:FRE) Primary Mortgage Market SurveySM (PMMSSM) found that mortgage rates rose slighly this week. According to the survey, the 30-year fixed-rate mortgage (FRM) averaged 5.80 percent, with an average 0.6 point, for the week ending September 22, 2005, up from last week when it averaged 5.74 percent. Last year at this time, the 30-year FRM averaged 5.70 percent.
The average for the 15-year FRM this week is 5.37 percent, with an average 0.7 point, up from last week when it averaged 5.32 percent. A year ago, the 15-year FRM averaged 5.10 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.31 percent this week, with an average 0.8 point, up from last week when it averaged 5.26 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, up slightly from last week when it averaged 4.46 percent. At this time last year, the one-year ARM averaged 4.00 percent.
"Mortgage rates look like they are back on track where the Fed wants them, which is gradually rising," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Freddie Mac's economic forecast calls for a cooling of the housing market going into next year, and gently rising rates are part of that scenario.
"However, the resiliency of the housing sector continues to amaze. Mortgage applications are running at a strong pace, according to the Mortgage Bankers Association, and the most recent housing starts figures, although coming in lower than expected, were still at near record levels. 2005 will be another banner year for the housing industry."
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Source: Freddie Mac
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