Katrina's Destruction Will Likely Slow Economic Growth In Fourth Quarter
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market SurveySM (PMMSSM) in which the 30-year fixed-rate mortgage (FRM) averaged 5.71 percent, with an average 0.6 point, for the week ending September 8, 2005, unchanged from last week when it averaged 5.71 percent. Last year at this time, the 30-year FRM averaged 5.83 percent. The average for the 15-year FRM this week is 5.30 percent, with an average 0.6 point, down from last week when it averaged 5.32 percent. A year ago, the 15-year FRM averaged 5.22 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.24 percent this week, with an average 0.6 point, down from last week when it averaged 5.30 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year. One-year Treasury-indexed ARMs averaged 4.45 percent this week, with an average 0.7 point, down from last week when it averaged 4.48 percent. At this time last year, the one-year ARM averaged 4.00 percent. "We expect that near-term growth will now be a bit weaker than had been anticipated, due in very large part to the disruption in economic activity brought on by Katrina last week," said Frank Nothaft, vice president and chief economist at Freddie Mac. "However, the federal monies that will flow into the damaged areas and the lower interest rates brought on by the disaster will stimulate economic growth next year, making up for the slowdown in the last part of this year." "Reconstruction efforts are going to place upward pressure on construction material, and this could add another two percent to three percent to new home costs in the coming months, but should be balanced out by slightly lower mortgage rates." |
