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Long-term Mortgage Rates Dip To Levels Posted In Spring

September 15, 2006

McLean, VA – Results of the Freddie Mac Primary Mortgage Market Survey® (PMMSSM) found that the 30-year fixed-rate mortgage (FRM) averaged 6.43 percent with an average 0.5 point for the week ending September 14, 2006, down from last week when it averaged 6.47 percent. Last year at this time, the 30-year FRM averaged 5.74 percent.

The 15-year FRM this week averaged 6.11 percent with an average 0.4 point, down from last week when it averaged 6.16 percent. A year ago, the 15-year FRM averaged 5.32 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.10 percent this week, with an average 0.6 point, down from last week when it averaged 6.14 percent. A year ago, the five-year ARM averaged 5.26 percent.

One-year Treasury-indexed ARMs averaged 5.60 percent this week with an average 0.7 point, down from last week when it averaged 5.63 percent. At this time last year, the one-year ARM averaged 4.46 percent.

"Although 30-year mortgage rates are about three-fourths of a percentage point higher than they were last year, it's good to keep in mind that rates have dropped from the high of 6.80 percent reached just eight weeks ago," said Frank Nothaft, Freddie Mac vice president and chief economist. "And with short-term interest rate increases seemingly on hold, for a while at least, interest rates overall should not experience any big shifts in either direction.

"The risk to our forecast of relatively stable mortgage rates is that inflation will unexpectedly heat up, causing bond markets to raise their expectations that the Fed will intervene by raising short-term rates. In that case, mortgage rates will again start to rise."

Source: Freddie Mac

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