Freddie Mac Says Mortgage Rates Rebounded from Year-End Highs

Mortgagerninterest rates declined slightly during the week, easing further off of thernsudden increases in rates the last week of the year.  Freddie Mac reported that the average raternfor a 30-year fixed-rate (FRM) mortgage during the week ended January 14 wasrn5.06 percent with 0.7 point compared to 5.09 percent and 0.7 point a weekrnearlier. During the week ended December 31 the rate had jumped 9 basis pointsrnto 5.24 percent.

Thisrnweek the 15-year FRM dropped five basis points to 4.45 percent with 0.6rnpoint.  During the week ended January 7,rnthe average rate was 4.50 percent with 0.7 point.  The 15-year had also experienced a surgernbetween Christmas and New Year, rising 9 basis points to 4.54 percent.

Thernweekly Primary Mortgage Market Survey reported that 5-year Treasury-indexedrnhybrid adjustable-rate mortgages (ARM) averaged 4.32 percent compared to 4.44rnpercent.  Fees and points also declinedrnfrom 0.6 to 0.5 point.

Thern1-year Treasury-indexed ARM was the only Freddie Mac mortgage to show anrnincrease during the week, moving from 4.31 percent to 4.39 percent.  Fees and points declined from 0.6 to 0.5rnpoint.

FrankrnNothaft, Freddie Mac vice president and chief economist said, “Interestrnrates for fixed-rate mortgages eased a little further this week, while ARMrnrates were mixed.  With fixed mortgagesrnrates staying near a record low, many homeowners are taking the opportunity tornrefinance.  For instance, over the pastrnthree-and-a-half months, on average more than 75 percent of conventionalrnmortgage applications were for refinance transactions, according (to) thernMortgage Bankers Association.

“ThernFederal Reserve recently reported positive news in both the housing market andrnthe overall state of the economy in its January 13^th regionalrneconomic report, which spanned the last few months of 2009.  Economic activity improved in 10 of its 12rndistricts.  Home sales, especially forrnlower-priced homes, increased due in part to the homebuyer tax credit and housernprices appeared to have changed little since its last report.”

FanniernMae's yields for the week ended January 8 were mixed relative to the previousrnweek.  The conventional 30-year FRM was uprnfrom 4.89 percent to 4.95 percent while the 15-year FRM declined from 4.21rnpercent to 4.18 percent.  Governmentrnguaranteed FHA and VA mortgages were also up, rising from 5.67 percent to 5.74rnpercent. The 1-year ARM averaged 2.70 percent compared to 2.74 percent thernprevious week.  All Fannie Mae yields arernreported net of servicing fees.

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