Industry News

Mortgage Rates Plummet To New, Record Breaking Lows This Week, According To Freddie Mac Survey

July 26, 2002

One-Year Arm Also Tumbles To Lowest Level In More Than Eight Years

McLean, VA ? In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.34 percent, with an average 0.6 point, for the week ending July 26, 2002, down from 6.49 percent last week. Last year at this time, the 30-year FRM averaged 7.03 percent. This is the lowest the 30-year FRM has been since Freddie Mac began tracking this figure 31 years ago.

The average for the 15-year FRM this week is 5.76 percent, with an average 0.5 point, down from last week's average of 5.93 percent. A year ago, the 15-year FRM averaged 6.58 percent. The 15-year FRM has not been this low at any time since Freddie Mac started tracking it in August of 1991.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.31 percent this week, with an average 0.5 point, down from last week's average of 4.50 percent. This time last year, the one-year ARM averaged 5.72 percent. The 1-year ARM has not been this low since the week ending February 25, 1994, when it averaged 4.25 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Investors, concerned with the stock market, are putting more of their money into Treasuries. This, in turn, drives down the cost of borrowing," said Robert Van Order, Freddie Mac chief international economist. "As a result, we are experiencing record-breaking low mortgage rates that are fueling yet another rush to refinance.

"I would, however, be surprised to see rates fall much lower than today's figures. For that to happen, the stock market would have to tumble even further than it already has."

Source: Freddie Mac

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