Industry News

Lower Mortgage Rates Continue To Prevail

March 14, 2003

30-Year Fixed-Rate Under Six Percent For All Of 2003

McLean, VA - In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.61 percent, with an average 0.6 point, for the week ending March 14, 2003, down from 5.67 percent last week, and setting still another record low. Last year at this time, the 30-year FRM averaged 7.08 percent.

The average for the 15-year FRM this week is 4.93 percent, with an average 0.5 point, down from last week's average of 5.01 percent, also the lowest ever recorded since Freddie Mac started tracking it in 1991. A year ago, the 15-year FRM averaged 6.59 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.68 percent this week, with an average 0.6 point, down from 3.76 percent last week, and also setting another low in Freddie Mac's survey. At this time last year, the one-year ARM averaged 5.08 percent.

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

"The escalating tensions within the U.N. over the impending resolution on Iraq and dismal economic news this week sent the stock market tumbling and with it went bond and mortgage rates," said Amy Crews Cutts, Freddie Mac deputy chief economist. "This is the fifth time this year that rates on 30-year fixed-rate mortgages set an all time record low in Freddie Mac's interest rate survey.

"The high volatility in interest rates is likely to remain for a while. But since there are no upward pressures at the moment any sustained rise in rates is highly unlikely. We expect interest rates for fixed-rate mortgages will stay around 5.7 percent in the near term -- good news for housing markets, which should be even stronger this year than in 2002 in terms of sales and construction."

Source: Freddie Mac

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