30-Year Fixed Mortgage Rates Fall To 4.51% For Week Ending July 14 As “Weak” Employment Report Lowers Inflationary Threats To Economy

15 07 2011
  • 30-year fixed-rate mortgage (FRM) averaged 4.51 percent with an average 0.7 point for the week ending July 14, 2011, down from last week when it averaged 4.60 percent. Last year at this time, the 30-year FRM averaged 4.57 percent.  
  • 15-year FRM this week averaged 3.65 percent with an average 0.6 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent.  
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.29 percent this week, with an average 0.6 point, down from last week when it averaged 3.30 percent. A year ago, the 5-year ARM averaged 3.85 percent.
  • 1-year Treasury-indexed ARM averaged 2.95 percent this week with an average 0.5 point, down from last week when it averaged 3.01 percent. At this time last year, the 1-year ARM averaged 3.74 percent.  

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Long-term bond yields and mortgage rates fell this week following a weak employment report. The economy added 18,000 jobs in June, well below the market consensus forecast, and the unemployment rate rose to 9.2 percent, the highest since December 2010. In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term.”

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=46050


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30-Year Fixed Mortgage Rates Move Higher For Week To Average Of 4.60%, Slightly Higher Than 4.57% Average Rate One-Year Ago

7 07 2011
  • 30-year fixed-rate mortgage (FRM) averaged 4.60% with an average 0.7 point for the week ending July 7, 2011, up from last week when it averaged 4.51 percent. Last year at this time, the 30-year FRM averaged 4.57 percent.  
  • 15-year fixed-rates this week averaged 3.75% with an average 0.7 point, up from last week when it averaged 3.69 percent. A year ago at this time, the 15-year FRM averaged 4.07 percent.  
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.30% this week, with an average 0.6 point, up from last week when it averaged 3.22 percent. A year ago, the 5-year ARM averaged 3.75 percent.
  • 1-year Treasury-indexed ARM averaged 3.01% this week with an average 0.6 point, up from last week when it averaged 2.97 percent. At this time last year, the 1-year ARM averaged 3.75 percent.  

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Mortgage rates followed Treasury yields higher over the holiday week but remain quite affordable by historical standards. For instance, interest rates on all mortgages outstanding in the first quarter of this year averaged just under 6 percent. With today’s rates, these homeowners who have the ability to refinance could shave $169 per month in interest payments on a $200,000, 30-year fixed mortgage.”

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=44374


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Freddie Mac Reports 30-Year Fixed Mortgage Rates Hold Steady At 4.51% At End Of June; Rates Likely To Move Higher Next Week As 10-Year T-Notes Move Lower On Economic News, Greek Vote

30 06 2011
  • 30-Year Fixed-Rate (FRM) averaged 4.51 percent with an average 0.7 point for the week ending June 30, 2011, up from last week when it averaged 4.50 percent. Last year at this time, the 30-year FRM averaged 4.58 percent.  
  • 15-Year FRM this week averaged 3.69 percent with an average 0.7 point, the same from last week when it averaged 3.69 percent. A year ago at this time, the 15-year FRM averaged 4.04 percent.  
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.22 percent this week, with an average 0.6 point, down from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 3.79 percent.
  • 1-year Treasury-indexed ARM averaged 2.97 percent this week with an average 0.6 point, down from last week when it averaged 2.99 percent. At this time last year, the 1-year ARM averaged 3.80 percent.  

Quotes

  • “Interest rates on 30-year fixed mortgages hovered around 4.5 percent for the fourth consecutive week following mixed reports on the strength of the economy. First quarter economic growth was revised up in the final estimate, but growth in consumer spending stagnated in May while April’s figure was revised downward; consumer expenditures account for roughly two-thirds of the nation’s gross domestic product.
  • “Meanwhile, there were some signs of improvement in the housing market. In April, the S&P/Case-Shiller® 20-city composite home price index rose 0.7 percent, representing the first monthly increase since July 2010. However, much of the improvement reflected the seasonal increase in homebuying over the spring-summer period.  Pending existing home sales rebounded in May, exhibiting the largest monthly increase since November 2010.”
  • Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=44212


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30-Year Fixed Mortgage Rates Remain Mostly “Unchanged” At 4.50% In Most Recent Week On Reports Of Continued Weakness In Housing Markets

23 06 2011
  • 30-Year Fixed Rates (FRM) averaged 4.50 percent with an average 0.8 point for the week ending June 23, 2011, unchanged from last week when it averaged 4.50 percent. Last year at this time, the 30-year FRM averaged 4.69 percent.  
  • 15-Year Fixed Rates  this week averaged 3.69 percent with an average 0.7 point, up from last week when it averaged 3.67 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.  
  • 5-Year Treasury-Indexed Hybrid Adjustable-Rate Mortgages (ARM) averaged 3.25 percent this week, with an average 0.6 point, down from last week when it averaged 3.27 percent. A year ago, the 5-year ARM averaged 3.84 percent.
  • 1-Year Treasury-Indexed ARM averaged 2.99 percent this week with an average 0.5 point, up from last week when it averaged 2.97 percent. At this time last year, the 1-year ARM averaged 3.77 percent.  

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Mortgage rates were virtually unchanged this week amid further indications of a soft housing market. Although new construction on single-family homes ticked up in May from April, it was still below the overall pace set in 2010. Moreover, existing home sales fell 3.8 percent in May to the fewest since November 2010.
  • “The Federal Reserve also reiterated that the housing sector continues to be depressed in its June 22nd policy committee statement. The S&P/Case-Shiller® National Home Price Index fell 2.1 percent between the fourth quarter of 2010 and first quarter 2011. Based on a recent survey by MarcoMarkets  of 108 professional forecasters taken in early June, the index is predicted to decline another 1.5 percent by the fourth quarter of this year.”

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=43313


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Average 30-Year Mortgage Rates Drop To 4.76%, A Two-Month Low, As Investors Buy Safe “US Treasuries” During Japan Crisis; Housing Starts Fall To 22-Month Low As Foreclosures Keep Home Prices Down

18 03 2011

  • Mortgage rates followed US Treasury rates lower to the lowest levels in almost two months
  • The nuclear crisis in Japan has spurred demand for US Government debt
  • The average rate for 30-year fixed loans declined to 4.76 percent in the week ended today from 4.88 percent a week ago
  • The average 15-year rate was 3.97 percent, down from 4.15 percent in each of the past two weeks
  • The drop in rates probably will lead to an increase in refinancing
  • Mortgage applications in the U.S. fell 0.7 percent in the week ended March 11
  • Purchase applications declined 4 percent and its refinancing gauge climbed 0.9 percent
  • Housing starts plunged to a 22-month low in February, and permits for construction fell to a record low
  • U.S. homebuilders are competing with foreclosures and falling prices for existing homes
  • From a low of 4.17% in Nov 2010, mortgage rates reached a 10-month high of 5.05 percent in February

For more:  http://www.bloomberg.com/news/2011-03-17/30-year-fixed-rate-falls-to-4-76-from-4-88-freddie-mac-says.html


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Mortgage Rates End Week Nearly Unchanged As Economic News Shows Strengthening Economy

5 03 2011

 

  • Mortgage rates ended the week basically unchanged
  • There was high daily volatility caused by events in the Middle East
  • Economic data during the week was stronger than expected hinting that economy is growing
  • The Chicago PMI manufacturing index rose to the highest level since July 1988
  • The ISM Services index rose to the highest level since August 2005
  • Weekly Jobless Claims dropped to the lowest level since May 2008
  • The Fed’s Beige Book reported that many companies were passing through price increases due to rising commodity prices
  • Mortgage rates reacted to the data by moving higher later in the week
  • Friday’s Employment report were strong but they did not exceed expectations
  • The forecast was for 200K jobs and the report showed the economy adding 192K jobs in February
  • The Unemployment Rate declined to 8.9% from 9.0% in January

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Mortgage Rates Move Lower During Week As Economic Reports Show Inflation Remaining At Lower Levels

19 02 2011

 

  • Mortgage rates moved lower during week on news that inflation was not as negative as investors may have feared
  • Economic growth data was mixed
  • Retail Sales and Industrial Production both fell short of expectations
  • Food and energy prices have been rising globally, but overall inflation has stayed low
  • January CPI was a tame 1.6% higher than one year ago
  • Core CPI, which excludes food and energy, was only 1.0% higher than one year ago
  • The Prices Paid component of the Philly Fed index jumped sharply, reflecting that raw material costs rose
  • But companies might have trouble passing along higher costs to consumers
  • Fed minutes revealed disagreement is growing among Fed officials about the benefits of continuing the quantitative easing program which is scheduled to end in June
  • Investors expect the Fed to complete the $600 billion in purchases of Treasury securities as originally planned
  • The Fed raised its forecast for 2011 GDP growth to 3.65% from their prior estimate of 3.30% in November
  • The Fed lowered its forecast for 2011 core PCE inflation levels
  • With all the recent evidence of rising prices, lower inflation predictions were not expected.

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Mortgage Rates End Week Slightly Lower On Subdued Inflation And Good Demand For Treasury Bonds

14 01 2011

  • The inflation data released during the week showed that inflation continued to remain at very low levels.
  • Demand for longer-term Treasury securities was strong.
  • Despite improving economic growth, there have been few signs of rising inflation in the current environment, which has helped keep mortgage rates at low levels.
  • The December Consumer Price Index (CPI), the most closely watched inflation indicator, was just 1.5% higher than one year ago.
  • Core CPI, which excludes the volatile food and energy components, increased an even lower 0.8% from one year ago.
  • While food and energy prices recently have been rising more rapidly than the overall price level, investors generally focus on core inflation.
  • The Fed considers a range for core inflation between 1.5% and 2.0% to be most desirable for the long term.

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Mortgage Market Weekly Update: Mortgage Rates Move Higher On Stronger Economic Growth And Tax Deal

17 12 2010

It was another tough week for mortgage rates. Tuesday’s Fed meeting contained no surprises, so investors focused on stronger than expected economic growth data and progress on the tax deal, which was passed late in the week. Once again, nearly all the news was unfavorable for mortgage rates, which ended the week higher.

Recent economic growth data has mostly exceeded expectations, causing several economists to raise their forecast for GDP in 2011. In particular, this week’s Retail Sales and manufacturing sector data surpassed the consensus estimates. Faster economic growth generally produces higher future inflation expectations, which leads to higher bond yields.

The tax deal has been negative for mortgage rates in three ways. First, it’s expected to boost economic growth. In addition, it will increase the budget deficit, which will lead to a larger supply of Treasury securities, pushing bond yields higher. Finally, this additional fiscal stimulus will make it less likely that the Fed will add more monetary stimulus. That said, the Fed is focused on unemployment that is far too high and inflation that is below its desired level. At this point, the Fed is in no rush to begin to tighten policy.


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Mortgage Market Update: Mortgage Rates End Week Sharply Higher On Inflationary Fears From Proposed Tax Deal

10 12 2010

If passed, the proposed tax deal is expected to boost economic growth but also increase the budget deficit, both of which are negative for mortgage rates. Faster economic growth generally increases the outlook for future inflation, and higher inflation leads to higher mortgage rates.

At the start of the week it looked like mortgage rates might reverse some of their recent increases. Tuesday’s announcement that President Obama reached an agreement with Republican leaders on a tax package was very unfavorable for mortgage rates, however, and they rose sharply following the news. Despite strong demand for the Treasury auctions later in the week, mortgage rates ended the week at the highest levels since June.

While investors generally expected an extension of the Bush era tax rates for all income levels, the proposed tax deal includes additional spending measures that were more of a surprise. The plan includes a one year payroll tax reduction and an extension of unemployment benefits for the long-term unemployed. As a result, estimates for the size of the tax plan are significantly bigger than expected, leading to the large reaction in mortgage rates. There is some resistance to the deal, but most analysts expect the final version to be similar to the current proposal.

An increase in the budget deficit means the government must issue more Treasury securities to pay for the spending. As the supply of Treasuries goes up, yields must rise to attract additional investors, so mortgage rates must rise as well.


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