Long- And Short-Term Rates Rise on Stronger Than Expected Consumer Confidence and Fed Remarks
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.37 percent with an average 0.4 point for the week ending May 24, 2007, up from last week when it averaged 6.21 percent. Last year at this time, the 30-year FRM averaged 6.62 percent. The 15-year FRM this week averaged 6.06 percent with an average 0.4 point, up from last week when it averaged 5.92 percent. A year ago, the 15-year FRM averaged 6.23 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent this week, with an average 0.5 point, up from last week when it averaged 5.92 percent. A year ago, the 5-year ARM averaged 6.21 percent. One-year Treasury-indexed ARMs averaged 5.64 percent this week with an average 0.6 point, up from last week when it averaged 5.48 percent. At this time last year, the 1-year ARM averaged 5.61 percent. "Stronger than expected consumer confidence and recent comments from members of the Federal Reserve (Fed) raised some inflation concerns in the market, causing it to lower expectations of a Fed rate cut this year. This helped push mortgage rates higher this week," said Frank Nothaft, vice president and chief economist. "We expect a gradual rise in mortgage rates over the remainder of the year with sales slipping further in the second half of the year. A gradual recovery returns toward the end of 2007 with modest increases in sales and construction during 2008." "The slowdown in the housing market is evident in home sales. Over the first three months of 2006, interest rates for 30-year fixed-rate mortgages averaged 6.25 percent, which spurred 1.11 million (annualized) new home sales, and although mortgage rates in the first quarter of 2007 averaged a little lower than those in 2006, they fostered only 0.86 million in sales, or a 23 percent drop; existing home sales fell 7 percent." |
