Long-Term Rates Fall Below Short-Term

""Freddie Mac"":http://www.freddiemac.com released the results of its weekly ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/release.html (PMMS) on Thursday. For the week ending April 23, 2009, Freddie's study shows that long-term interest rates are now lower than those for short-term mortgage products. The GSE also said that fixed-rates this week are hovering at, or just above their all-time lows.
Frank Nothaft, Freddie Mac's VP and chief economist, explained, ""Although long-term mortgage rates eased slightly this week, ARM [adjustable-rate mortgage] rates remain elevated relative to those fixed-rate mortgages. For instance, interest rates for 1-year ARMs exceeded those for 30-year fixed-rate mortgages over the last two weeks; this is the first time this has happened since Freddie Mac began collecting data for ARMs in January 1984.""
Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) this week averaged 4.80 percent (0.7 point). Last week, the 30-year FRM averaged 4.82 percent. Last year at this time, it was 6.03 percent.
The 15-year FRM was unchanged, coming in at 4.48 percent (0.7 point). This is tied with last week for the lowest the 15-year FRM has been since Freddie Mac began tracking it in August 1991. A year ago at this time, the 15-year FRM averaged 5.62 percent.
The 5-year Treasury-indexed hybrid ARM averaged 4.85 percent this week (0.6 point), down from last week when it averaged 4.88 percent. This is the lowest the 5-year ARM has been since Freddie Mac began tracking it in January 2005. A year ago, the 5-year ARM was 5.68 percent.
One-year Treasury-indexed ARMs averaged 4.82 percent this week (0.4 point). Last week the 1-year ARM averaged 4.91 percent, and last year at this time it was 5.29 percent.
According to Nothaft, the housing market is showing further signs of possible improvement. ""House prices rose for the second consecutive month in February, the first back-to-back increase since April 2007, according to the Federal Housing Finance Agency,"" Nothaft said. ""Among the nine Census divisions, six experienced positive gains in February, led by a monthly increase of 3.8 percent in the Pacific Division,"" he explained.
""Bankrate.com"":http://www.bankrate.com, which also issues a ""weekly survey"":http://www.bankrate.com/mortgagerates on mortgage interest rates, said that jumbo mortgage rates have hit a two-year low. Jumbo mortgages, those too large to be purchased or guaranteed by the GSEs, carry higher rates than smaller, conforming loans. But this week, Bankrate said, the average jumbo 30-year fixed rate dropped sharply to 6.52 percent.