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Long- And Short-term Mortgage Rates Flat This Week

October 6, 2006

Refinancing Last Week Made Up Nearly Half Of All Mortgage Applications


Freddie Mac

McLean, VA – The results of Freddie Mac Primary Mortgage Market Survey® (PMMSSM) found that the 30-year fixed-rate mortgage (FRM) averaged 6.30 percent with an average 0.3 point for the week ending October 5, 2006, down very slightly from last week when it averaged 6.31 percent. Last year at this time, the 30-year FRM averaged 5.98 percent. This is the lowest the 30-year FRM has been since the week of March 2, 2006, when it averaged 6.24 percent.

The 15-year FRM this week averaged 5.98 percent with an average 0.4 point, unchanged from last week. A year ago, the 15-year FRM averaged 5.54 percent. This is the lowest the 15-year FRM has been since the week ending March 23, 2006, when it averaged 5.97 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.00 percent this week, with an average 0.5 point, unchanged from last week. A year ago, the five-year ARM averaged 5.48 percent. This is the lowest the 5-year ARM has been since the week ending March 23, 2006, when it averaged 5.96 percent.

One-year Treasury-indexed ARMs averaged 5.46 percent this week with an average 0.7 point, down very slightly from last week when it averaged 5.47 percent. At this time last year, the one-year ARM averaged 4.77 percent. The 1-year ARM has not been lower since the week ending March 23, 2006, when it averaged 5.41 percent.

"Mortgage rates fell to a six-month low this past week, and, not surprisingly, home refinancing rose 18 percent last week, accounting for almost half of all mortgage applications," said Frank Nothaft, Freddie Mac vice president and chief economist. "This is due both to the recent decline in mortgage rates and to homeowners who are refinancing ARMs rather than waiting for them to reset in the future when rates may be higher.

"Even though rates have fallen recently, housing activity continues to slow while new construction wanes, leading Fed Chairman Bernanke to expect that the national economic rate of growth will lose up to one full percentage point in the last half of this year."


The National Mortgage Rate Snapshop
This Week One Week Ago One Year Ago
30-Yr 15-Yr 5-Yr
ARM
1-Yr ARM
6.30 5.98 6.00 5.46
0.3

0.4

0.5 0.7
30-Yr 15-Yr 5-Yr
ARM
1-Yr ARM
6.31 5.98 6.00 5.47
0.4

0.4

0.5 0.6
30-Yr 15-Yr 5-Yr
ARM
1-Yr ARM
5.98 5.54 5.48 4.77
0.5 0.5 0.6 0.6



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