Industry News

Mortgage Rates Rise Slightly In Reaction To Bond Market

November 5, 2004

Outlook For Housing Industry Remains Rosy

McLean, VA – Freddie Mac (NYSE:FRE) released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 5.70 percent, with an average 0.6 points, for the week ending November 4, 2004, up from last week when it averaged 5.64 percent. Last year at this time, the 30-year FRM averaged 5.94 percent.

The average for the 15-year FRM this week is 5.08 percent, with an average 0.6 points, also up from last week when it averaged 5.01 percent. A year ago, the 15-year FRM averaged 5.26 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.00 percent this week, with an average 0.6 point, up from last week when it averaged 3.96 percent. At this time last year, the one-year ARM averaged 3.74 percent.

“The slight increase in mortgage rates this week was due in large part to volatility in long-term bond yields,” said Frank Nothaft, Freddie Mac chief economist. “The uncertainty in bond yields reflected weakness in the manufacturing industry that was offset by economic reports of strength in the service sector.

“When taken as a whole, this week’s economic data point towards both low mortgage rates and a growing economy, both of which are good news for current homeowners looking to refinance and for families hoping to become homeowners.”

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to create a continuous flow of funds to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases mortgages from lenders and packages them into securities that are sold to investors. Over the years, Freddie Mac has made home possible for one in six homebuyers in America.

Source: Freddie Mac

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