In Freddie Mac’s results of its Primary Mortgage Market Survey (PMMS) the 30-year fixed-rate mortgage (FRM) averaged 6.46 percent with an average 0.7 point for the week ending October 30, 2008, up from the previous week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.26 percent.

The 15-year FRM this week averaged 6.19 percent with an average 0.7 point, up from the previous week when it averaged 5.72 percent. A year ago at this time, the 15-year FRM averaged 5.91 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.36 percent this week, with an average 0.7 point, up from the previous week when it averaged 6.06 percent. A year ago, the 5-year ARM averaged 5.98 percent.

One-year Treasury-indexed ARMs averaged 5.38 percent this week with an average 0.6 point, up from the previous week when it averaged 5.23 percent. At this time last year, the 1-year ARM averaged 5.57 percent.

“Long-term mortgage rates followed long-term Treasury bond yields higher this week, pushing fixed-rate mortgages up to levels of two weeks ago,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The Federal Reserve’s 0.50 percentage point cut in the discount rate and federal funds target rate on Wednesday was widely anticipated in the financial markets and is likely to keep short-term interest rates low; consequently, initial interest rates on ARMs, which tend to be set relative to other short-term rates, may remain near current levels.

“In other news, house-price declines in many markets have improved housing affordability and stimulated home sales. In September, sales of existing homes rose 5.5 percent while sales of new homes were up 2.7 percent, at a seasonally-adjusted annual rate.”

Written by Realty Times Staff

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