Stronger Than Expected Economic Growth
November 4, 2005
Spurred Mortgage Rates To Climb This Week One-Year ARM Is Highest In Over Three Years
McLean, VA – esults of Freddie Mac's (NYSE:FRE) Primary Mortgage Market SurveySM (PMMSSM) found that the 30-year fixed-rate mortgage (FRM) averaged 6.31 percent, with an average 0.5 point, for the week ending November 3, 2005, up from last week’s average of 6.15 percent. Last year at this time, the 30-year FRM averaged 5.70 percent.
The average for the 15-year FRM this week is 5.85 percent, with an average 0.5 point, up from last week when it averaged 5.69 percent. A year ago, the 15-year FRM averaged 5.08 percent
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.76 percent this week, with an average 0.5 point, up from last week when it averaged 5.63 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.
One-year Treasury-indexed ARMs averaged 5.09 percent this week, with an average 0.5 point, up from last week when it averaged 4.91 percent. At this time last year, the one-year ARM averaged 4.00 percent. This is the highest the one year ARM has been since March 29, 2002, when it was 5.11 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Based on preliminary GDP figures for the third quarter, the economy is expanding faster than had been expected," said Frank Nothaft, Freddie Mac vice president and chief economist. "Originally, the markets had lowered economic expectations for the third quarter because of the impact of the hurricanes. So the news of an economy growing at such a strong pace gave financial markets a jolt and added to the impetus that caused mortgage rates to rise again this week.
"It’s interesting to note that although mortgage rates have been rising lately, rates are still an average of about two percent less than other interest rates – such as car loans – made by lending institutions, according to Bankrate.com.
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Source: Freddie Mac