Thirty-year Mortgage Rate Drops Slightly This Week
March 3, 2006
Fifteen-Year Remains The Same
McLean, VA – Results of the Freddie Mac (NYSE:FRE)Mortgage Market SurveySM (PMMSSM) found the 30-year fixed-rate mortgage (FRM) averaged 6.24 percent, with an average 0.6 point, for the week ending March 2, 2006, down from last week's average of 6.26 percent. Last year at this time, the 30-year FRM averaged 5.79 percent.
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The average for the 15-year FRM this week is 5.89 percent, with an average 0.6 point, unchanged from last week's average of 5.89 percent. A year ago, the 15-year FRM averaged 5.33 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.97 percent this week, with an average 0.6 point, up slightly from last week when it averaged 5.96 percent. A year ago, the five-year ARM averaged 5.17 percent.
One-year Treasury-indexed ARMs averaged 5.34 percent this week, with an average 0.8 point, up from last week when it averaged 5.32 percent. At this time last year, the one-year ARM averaged 4.14 percent.
“Consumer confidence slipped in February to the lowest reading in three months, but manufacturing activity appears to have strengthened last month. On net, the latest economic news had little effect on mortgage rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Over the past five weeks, mortgage rates have remained within a narrow range of 0.1 percentage points around this week's averages. Our forecast calls for rates on 30-year fixed-rate mortgages to increase about one-quarter of a percentage point by the end of the year.
“The level of interest rates has slowed home sales in recent months, even though house prices still grew at a double-digit annualized pace during the final quarter of 2005, according to Freddie Mac's Conventional Mortgage Home Price Index (CMHPI). Since the average time homes are on the market is near a three-year high, house price growth should slow to single-digit figures, which is consistent with historical periods,” Nothaft added.
Source: Freddie Mac