Long-Term Rates Down And Short-Term Rates Up
McLEAN, VA -- In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.81 percent, with an average 0.7 point, for the week ending May 24, 2002, down from 6.89 percent last week. Last year at this time, the 30-year FRM averaged 7.20 percent.
The average for the 15-year FRM this week is 6.28 percent, with an average 0.7 point, down from last week's average of 6.37 percent. A year ago, the 15-year FRM averaged 6.74 percent.
One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.85 percent this week, with an average 0.7 point, up from last week's average of 4.81 percent. This time last year, the one-year ARM averaged 5.85 percent. (Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Although mortgage rates are at generationally low levels, refinancing should start to drop off, as just about everyone who had an incentive to refinance into a lower rate has done so," said Frank Nothaft, Freddie Mac's chief economist. "In the present economic environment, most who are refinancing now are doing so to take out some of the equity that has been building up over the last few years.
"We expect the figures for new home sales that will be released tomorrow to rise slightly, due in part to low mortgage rates in April. And even though higher new home sales will not completely offset the decline in refinancing, mortgage originations are still expected to reach near record levels this year."