""Freddie Mac"":http://www.freddiemac.com has released the results of its ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/release.html (PMMS) for the week ending February 19, 2009, showing that mortgage rates fell for all loan products this week.
The GSE reported that the 30-year fixed-rate mortgage (FRM) this week averaged 5.04 percent (with an average 0.7 point), down from last week when it averaged 5.16 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.
The 15-year FRM averaged 4.68 percent (with an average 0.6 point), down from last week when it averaged 4.81 percent, according to Freddie Mac's survey. A year ago, the 15-year FRM averaged 5.64 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.04 percent this week (with an average 0.6 point). That figure is also down from last week when they averaged 5.23 percent and from last year when the 5-year ARM averaged 5.37 percent.
One-year Treasury-indexed ARMs averaged 4.80 percent (with an average 0.5 point), declining from last week when it averaged 4.94 percent. At this time in 2008, the 1-year ARM averaged 4.98 percent.
According to Frank Nothaft, Freddie Mac VP and chief economist, ""Mortgage rates followed bond yields lower this week as recent economic reports suggest the economy is still slowing, which reduces the future threat of inflation.""
As evidence of this slowing, Nothaft pointed to reports that consumer sentiment fell in February for the first time in three months, nearing its lowest level since May 1980. He also noted that industrial production slowed in January by more than the market consensus, and emphasized that the Federal Reserve lowered its growth forecasts for the year, signaling a deeper contraction in the economy as the credit crunch tightens.
Nothaft added that the housing market is not doing any better. ""New housing construction slowed to an all-time record low of 466,000 homes (annualized) in January since records began in January 1959. And although homebuilder confidence ticked up in February from a record low, builder expectations of sales over the next six months"" are now the lowest they've been since January 1985, Nothaft explained.
A similar rate study by ""Bankrate"":http://www.bankrate.com/mortgagerates released today shows that for the nation's top 10 banks and thrifts in the top 10 markets, mortgage rates held relatively steady. Among the leading institutions, the average 30-year FRM came in at 5.34 percent this week (with an average of 0.41 discount and origination points), unchanged from last week.
Based on Bankrate's weekly survey, the average 15-year FRM sank below the 5 percent threshold to 4.93 percent, down from 5.03 percent last week. The average jumbo 30-year fixed rate dipped to 6.92 percent. ARMs were mixed, Bankrate said, with the average 1-year ARM pulling back to 5.47 percent and the 5/1 ARM holding at 5.37 percent.
According to Bankrate, mortgage rates finished where they started one week ago, after yo-yoing up and down in the days preceding President Obama's housing announcement. With the government committed to keeping mortgage rates low and recession fears continuing to grip investors, interest rates may head lower in the weeks to come, Bankrate said, a sentiment echoed by the company's forward-looking Rate Trend Index in which 46 percent of its mortgage expert panelists forecast further declines and 36 percent predict mortgage rates will remain unchanged over the next 30 to 45 days.