Signs Of Stronger Economic Growth Push Long-term Rates Higher
December 3, 2004
One-Year ARM Slips For The First Time In Five Weeks
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 5.81 percent, with an average 0.6 points, for the week ending December 2, 2004, up from last week when it averaged 5.72 percent. Last year at this time, the 30-year FRM averaged 5.89 percent.
The average for the 15-year FRM this week is 5.23 percent, with an average 0.6 points, up from last week when it averaged 5.15 percent. A year ago, the 15-year FRM averaged 5.22 percent.
One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.19 percent this week, with an average 0.6 point, down from last week when it averaged 4.27 percent. At this time last year, the one-year ARM averaged 3.77 percent.
"Recent economic indicators came out better than had been anticipated, buoying financial markets this week, and reinvigorating confidence in financial markets that the last three months of the year will post a very positive rate of economic growth," said Frank Nothaft, Freddie Mac vice president and chief economist. "Of course, with the signs of strong growth come fears of inflation and that tends to push up long-term mortgage rates.
"Freddie Mac's survey on house price appreciation released earlier today continues to reflect a robust housing industry. Currently, our forecast is for sales of new and existing homes to top 7.88 million this year, which is an increase of nearly 10 percent over 2003's record sales."
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Source: Freddie Mac