Industry News

Housing Continues To Shine Even As Mortgage Rates Hover Above Six Percent

May 20, 2004

Interest Rates Still Remain At Historically Low Levels Across The Board

McLean, VA – In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.32 percent, with an average 0.6 point, for the week ending May 27, 2004, up slightly from last week when it averaged 6.30 percent. Last year at this time, the 30-year FRM averaged 5.31 percent.

The average for the 15-year FRM this week is 5.69 percent, with an average 0.6 point, up a little from last week when it averaged 5.67 percent. A year ago, the 15-year FRM averaged 4.73 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.87 percent this week, with an average 0.6 point, down from last week when it averaged 3.99 percent. At this time last year, the one-year ARM averaged 3.63 percent.

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

"Although new home sales fell in April, existing home sales rose to the second highest level on record as homebuyers rushed to close in the face of low, but surely rising, mortgage rates," said Frank Nothaft, Freddie Mac vice president and chief economist. "Current mortgage rates are now a full point above where they were last year, and almost half a point higher than they were last month.

"Housing will, however, continue to be a pillar of strength for the economy in the coming years. In fact, we expect demand for housing will require production of about 2 million new housing units per year over the next decade, thus fueling growth in the various industries that support housing.

Source: Freddie Mac

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