Primary Mortgage Market Survey Press Release
BOND YIELDS PUSH MORTGAGE RATES TO HIGHEST LEVEL IN SEVEN MONTHS
June 11, 2009
Contact: corprel@freddiemac.com
or (703) 903-3933
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 5.59 percent with an average 0.7 point for the week ending June 11, 2009, up from last week when it averaged 5.29 percent. Last year at this time, the 30-year FRM averaged 6.32 percent. The last time the 30-year FRM was higher was the week ending November 26, 2008, when it averaged 5.97 percent.
The 15-year FRM this week averaged 5.06 percent with an average 0.7 point, up from last week when it averaged 4.79 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent. The last time the 15-year FRM was higher was the week ending December 11, 2008, when it averaged 5.20 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.17 percent this week, with an average 0.6 point, up from last week when it averaged 4.85 percent. A year ago, the 5-year ARM averaged 5.70 percent. The last time the 5-year ARM was higher was the week ending February 12, 2009, when it averaged 5.23 percent.
One-year Treasury-indexed ARMs averaged 5.04 percent this week with an average 0.7 point, up from last week when it averaged 4.81 percent. At this time last year, the 1-year ARM averaged 5.09 percent. The last time the 1-year ARM was higher was the week ending December 11, 2008, when it averaged 5.09 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Mortgage rates followed the increase in bond yields this week as the May employment report showed that the economy lost fewer jobs than the market consensus had expected,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Revisions to the jobs report for earlier months also showed the job loss was not as large as early estimates had indicated: March and April figures were revised to add an additional 82,000 jobs to the work force. As a result, federal funds futures rose after the report, signaling that the market expects the Federal Reserve may raise its benchmark rate sooner rather than later.
“Higher mortgage rates are slowing refinancing activity but not demand for home purchases. Over the three-weeks ending June 5th, interest rates for 30-year fixed-rate mortgages rose nearly one-half of a percentage point. As a result, conventional mortgage applications for refinance fell each week during this period while applications for home purchases consecutively rose, according to the Mortgage Bankers Association.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Summary of Survey Results
| Fixed-Rate Mortgages | ||||
|---|---|---|---|---|
| Average Conventional 30-Year Commitment Rate |
Fees & Points | Average Conventional 15-Year Commitment Rate |
Fees & Points | |
| US | 5.59 | 0.7 | 5.06 | 0.7 |
| Northeast | 5.58 | 0.9 | 5.04 | 0.8 |
| Southeast | 5.53 | 0.6 | 5.04 | 0.6 |
| N. Central | 5.62 | 0.7 | 5.07 | 0.7 |
| Southwest | 5.71 | 0.5 | 5.24 | 0.5 |
| West | 5.59 | 0.8 | 5.02 | 0.8 |
| Five/One-Year Adjustable-Rate Mortgages | |||
|---|---|---|---|
| First Commitment Rate | Fees & Points | Margin | |
| US | 5.17 | 0.6 | 2.75 |
| Northeast | 4.96 | 0.6 | 2.75 |
| Southeast | 5.12 | 0.8 | 2.75 |
| N. Central | 5.35 | 0.7 | 2.74 |
| Southwest | 5.45 | 0.5 | 2.76 |
| West | 5.15 | 0.6 | 2.73 |
| One-Year Adjustable-Rate Mortgages | |||
|---|---|---|---|
| First Commitment Rate | Fees & Points | Margin | |
| US | 5.04 | 0.7 | 2.74 |
| Northeast | 4.75 | 0.8 | 2.78 |
| Southeast | 5.28 | 0.6 | 2.75 |
| N. Central | 4.98 | 0.7 | 2.73 |
| Southwest | 5.53 | 0.6 | 2.78 |
| West | 4.93 | 0.7 | 2.71 |
Freddie Mac defines its regions as follows:
Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI,
CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU
Freddie Mac's Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS. Freddie Mac may change the methodology used to conduct the PMMS survey at any time and without notice.
DEFINITIONS
Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.
ARM Index - is the One-year Treasury
Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.
Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.
Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.
Weighted Averages for the Primary Mortgage Market Survey have been adjusted as of October 16, 2008. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under Home Mortgage Disclosure Act (HMDA) for 2007. The weights are listed in the table below.
| Freddie Mac Region | PMMS Weights |
| Northeast | 24.2 |
| Southeast | 19.8 |
| North Central | 15.1 |
| Southwest | 12.7 |
| West | 28.2 |
Primary Mortgage Market Survey Results
June 11, 2009
| 30-Year Fixed Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 5.59 | 5.58 | 5.53 | 5.62 | 5.71 | 5.59 |
| Fees & Points | 0.7 | 0.9 | 0.6 | 0.7 | 0.5 | 0.8 |
| 15-Year Fixed Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 5.06 | 5.04 | 5.04 | 5.07 | 5.24 | 5.02 |
| Fees & Points | 0.7 | 0.8 | 0.6 | 0.7 | 0.5 | 0.8 |
| 5/1-Year Adjustable Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 5.17 | 4.96 | 5.12 | 5.35 | 5.45 | 5.15 |
| Fees & Points | 0.6 | 0.6 | 0.8 | 0.7 | 0.5 | 0.6 |
| Margin | 2.75 | 2.75 | 2.75 | 2.74 | 2.76 | 2.73 |
| 1-Year Adjustable Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 5.04 | 4.75 | 5.28 | 4.98 | 5.53 | 4.93 |
| Fees & Points | 0.7 | 0.8 | 0.6 | 0.7 | 0.6 | 0.7 |
| Margin | 2.74 | 2.78 | 2.75 | 2.73 | 2.78 | 2.71 |
| The National Mortgage Rate Snapshot | ||||||||
|---|---|---|---|---|---|---|---|---|
| One Year Ago | One Week Ago | |||||||
| 30-YR | 15-YR | 5/1-YR | 1-YR ARM | 30-YR | 15-YR | 5/1-YR | 1-YR ARM | |
| Average | 6.09 | 5.65 | 5.51 | 5.06 | 5.29 | 4.79 | 4.85 | 4.81 |
| Fees & Points | 0.6 | 0.6 | 0.5 | 0.7 | 0.7 | 0.7 | 0.6 | 0.6 |
| Margin | N/A | N/A | 2.76 | 2.74 | N/A | N/A | 2.75 | 2.75 |