Primary Mortgage Market Survey Press Release
National Average Long-Term Mortgage Rate Rises to 5 Percent
October 22, 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 5.00 percent with an average 0.7 point for the week ending October 22, 2009, up from last week when it averaged 4.92 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.
The 15-year FRM this week averaged 4.43 percent with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago, the 5-year ARM averaged 6.06 percent.
The one-year Treasury-indexed ARM averaged 4.54 percent this week with an average 0.6 point, down from last week when it averaged 4.60 percent. At this time last year, the 1-year ARM averaged 5.23 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Following bond yields, long-term mortgages rates edged up slightly this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Although rates for 5/1 ARMs and traditional 1-year ARMs are around half a percentage point below 30-year fixed mortgages, consumers appear to be seeking the stability of fixed-rate mortgages. According to the Mortgage Bankers Association, ARMs averaged only about 6 percent of the number of mortgage applications in September and October thus far.
"The housing market is still trying to recover in the second half of the year. The Federal Reserve reported in its October 21st regional economic review that housing market conditions improved in recent weeks, primarily from a pickup in sales of low-to medium-priced houses. However, residential construction activity was reported to remain weak in most areas. New construction of single family homes rebounded in September, rising at a 3.9 percent annual rate, but did not erase all of the declines set in August, based on figures released by the Department of Commerce. Moreover, homebuilder confidence, as measured by the National Association of Homebuilder's Housing Market Index, fell slightly in October and marked the first decline since January of this year."
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 | 5.00 | 0.7 | 4.43 | 0.6 |
| Northeast | 5.01 | 0.7 | 4.42 | 0.6 |
| Southeast | 4.98 | 0.7 | 4.43 | 0.7 |
| N. Central | 5.05 | 0.6 | 4.44 | 0.6 |
| Southwest | 4.99 | 0.6 | 4.46 | 0.5 |
| West | 4.99 | 0.7 | 4.42 | 0.7 |
| Five/One-Year Adjustable-Rate Mortgages | |||
|---|---|---|---|
| First Commitment Rate | Fees & Points | Margin | |
| US | 4.40 | 0.6 | 2.74 |
| Northeast | 4.52 | 0.4 | 2.73 |
| Southeast | 4.12 | 0.8 | 2.75 |
| N. Central | 4.78 | 0.7 | 2.75 |
| Southwest | 4.40 | 0.5 | 2.78 |
| West | 4.30 | 0.6 | 2.73 |
| One-Year Adjustable-Rate Mortgages | |||
|---|---|---|---|
| First Commitment Rate | Fees & Points | Margin | |
| US | 4.54 | 0.6 | 2.77 |
| Northeast | 4.10 | 0.4 | 2.74 |
| Southeast | 4.78 | 0.6 | 2.75 |
| N. Central | 5.22 | 0.5 | 2.81 |
| Southwest | 4.58 | 0.6 | 2.83 |
| West | 4.36 | 0.7 | 2.75 |
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
October 22, 2009
| 30-Year Fixed Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 5.00 | 5.01 | 4.98 | 5.05 | 4.99 | 4.99 |
| Fees & Points | 0.7 | 0.7 | 0.7 | 0.6 | 0.6 | 0.7 |
| 15-Year Fixed Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 4.43 | 4.42 | 4.43 | 4.44 | 4.46 | 4.42 |
| Fees & Points | 0.6 | 0.6 | 0.7 | 0.6 | 0.5 | 0.7 |
| 5/1-Year Adjustable Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 4.40 | 4.52 | 4.12 | 4.78 | 4.40 | 4.30 |
| Fees & Points | 0.6 | 0.4 | 0.8 | 0.7 | 0.5 | 0.6 |
| Margin | 2.74 | 2.73 | 2.75 | 2.75 | 2.78 | 2.73 |
| 1-Year Adjustable Rate Mortgages | ||||||
|---|---|---|---|---|---|---|
| US | NE | SE | NC | SW | W | |
| Average | 4.54 | 4.10 | 4.78 | 5.22 | 4.58 | 4.36 |
| Fees & Points | 0.6 | 0.4 | 0.6 | 0.5 | 0.6 | 0.7 |
| Margin | 2.77 | 2.74 | 2.75 | 2.81 | 2.83 | 2.75 |
| 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 | 6.46 | 6.14 | 6.14 | 5.16 | 4.92 | 4.37 | 4.38 | 4.60 |
| Fees & Points | 0.6 | 0.6 | 0.6 | 0.6 | 0.7 | 0.7 | 0.6 | 0.5 |
| Margin | N/A | N/A | 2.74 | 2.73 | N/A | N/A | 2.74 | 2.76 |