In January 2016, the 1-year ARM was discontinued. Since April 1971, Freddie Mac has surveyed lenders across the nation weekly to determine the average 30-year fixed-rate mortgage rate; in 1984, the 1-year ARM was added to the survey and the 15-year fixed-rate mortgage rate was included beginning in 1991. In January 2005, Freddie Mac added a 5/1 hybrid ARM series to the survey.
Survey reminder emails are sent out on Mondays and lenders are asked to respond by close of business Wednesday. If we have received no response on Tuesday, we follow-up with a reminder email on Wednesday morning. We receive a few responses on Monday, but most responses are returned on Tuesday with the balance received on Wednesday. So, in general, the PMMS rates reflect loans offered Monday through Wednesday.
A “point” equals one percent of the loan amount. Discount points are used by consumers to buy down their mortgage interest rate. Therefore, an inverse relationship exists between the number of points paid and the given mortgage rate. Origination points are paid by consumers but are used to cover the costs of originating the mortgage, such as compensation for the loan officer, application processing costs, etc. The way we measure “points” for PMMS is by total points, which includes both discount and origination fees that have historically averaged around one point. The points quoted in the PMMS represent the average points charged for mortgages offered at the PMMS rate during the survey week.
In some areas it is common for home sellers to pay points on a homebuyer's loan. This results in loans from areas with seller-paid points displaying lower rates and higher points relative to loans from areas without seller-paid points. Historically, originators have attributed one point for origination costs, and charged for it either explicitly (paid at origination) or implicitly with a higher mortgage rate. Automated underwriting systems, such as Loan Product Advisor®, and shifts in the mortgage origination channels (e.g., emergence of Internet commerce) have increased loan processing efficiencies. However, it is not clear if these cost-savings are passed on to consumers through lower interest rates, lower points or a combination of the two. Many lenders offer their customers a menu of rate-point combinations. We ask that they provide their most popular combination for the survey.
No. The decrease in points resulted from a change in the PMMS survey methodology. Previously, we asked lenders for their average rate with one origination point and one discount point. Starting in 1998, the survey wording was changed to request the most popular rate and points combination offered to consumers, including the origination fee. We relaxed the restriction on points so the survey averages would better reflect the rates that consumers see in the marketplace.
Currently, lenders surveyed each week are a mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type originates nationwide.
The survey results each week are weighted based on the most recently released dollar volume of conventional, single-family originations within the Freddie Mac one-unit loan limit reported under the Home Mortgage Disclosure Act (HMDA) data – prior survey averages are not adjusted. A national average is then calculated as the weighted average based on the lender size.
The PMMS is available on Freddie Mac’s web site (www.freddiemac.com) under Mortgage Rates. It is also available on Bloomberg through NMCMFUS <INDEX>. The NMCMFUS series is the weekly PMMS rates.
Freddie Mac provides RSS feeds for several layouts for syndicated use on websites and allows users to publish or display PMMS data on websites subject to the following Terms and Conditions:
Find out how to syndicate the PMMS and display it on your website.
Quotes. These rates and points are indicative of what a consumer could expect to be offered if they were to request a loan on that day.
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