GSEs: Rates Lower in Week Ending October 8, 2009

by devteam October 8th, 2009 | Share

Mortgage rates just keep going down according torndata released this week by both Fannie Mae and Freddie Mac.

Freddie Mac's PrimaryrnMortgage Market Survey for the week ended October 8 showed an average rate forrnthe 30-year fixed-rate mortgage (FRM) of 4.87 percent with 0.7 point.  During the previous week the average was 4.94rnpercent also with 0.7 point.  This is thernlowest the 30-year rate has been since the week ended May 21 when it averagedrn4.82 percent.

The 15-year FRM set yetrnanother record this week with a rate that averaged 4.33 percent with 0.7 point.  Last week the average was 4.36 percent withrn0.6 point.  This is the fourthrnconsecutive week that the 15-year has reached new lows for the 15 years FreddiernMac has tracked the mortgage.

The five-yearrnTreasury-indexed hybrid adjustable-rate mortgage (ARM) also set a new recordrnlow at 4.35 percent with 0.5 point, down from 4.42 percent with 0.6 point.  Freddie Mac first started reporting on weeklyrnaverages for the hybrid in January, 2005.

One-year Treasury-indexedrnARMs averaged 4.53 percent, an increase from last week when it averaged 4.49rnpercent.  Fees and points were unchangedrnat 0.5 point.

Fannie Mae's weekly yields for the weekrnended October 2 also showed significant decreases for fixed rate mortgages.  The 30 year FRM was down 21 basis points tornan average of 4.49 percent.  The 15-yearrnFRM which was at 4.07 during the week ended September 25 dropped to 4.01 duringrnthe most recent period.  Government guaranteedrnVA/FHA loans, however, saw an increase in the average rate from 5.28 percent torn5.49 percent.

The one-year ARM was also up slightly,rnfrom 2.91 percent to 2.93 percent.

All Fannie Mae yields are quoted net ofrnservicing and other fees.

 “Long-term mortgage rates eased further thisrnweek,” said Frank Nothaft, Freddie Mac vice president and chiefrneconomist. “Interest rates for 30-year fixed-rate loans were the lowestrnsince mid-May; 15-year FRMs were at a record low since data were firstrncollected in 1991 and 5-year ARMs also hit an all-time record starting inrn2005. Compared to a year ago, consumers could shave almost $134 off theirrnmonthly mortgage payments on a 30-year fixed-rate loan for $200,000 byrnrefinancing.

“Such lowrnrates are spurring mortgage demand. Mortgage applications surged to a 19-weekrnhigh over the week ending on October 2nd, according to the MortgagernBankers Association.  Moreover, applications for home purchases were atrnthe strongest pace since the beginning of this year.”

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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