Industry News

Mortgage Rates Down Slightly In Freddie Mac’s Weekly Survey

June 9, 2006

Low Job Growth In May Helped Reduce Upward Pressure On Rates

The results of the Freddie MacPrimary Mortgage Market SurveySM (PMMSSM) determined thatthe 30-year fixed-rate mortgage (FRM) averaged 6.62 percent, with an average 0.5 point, for the week ending June 8, 2006, down from last week’s average of 6.67 percent. Last year at this time, the 30-year FRM averaged 5.56 percent.

The average for the 15-year FRM this week is 6.23 percent, with an average 0.5 point, down from last week’s average of 6.26 percent. A year ago, the 15-year FRM averaged 5.14 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.20 percent this week, with an average 0.5 point, down from last week when it averaged 6.26 percent. A year ago, the five-year ARM averaged 5.01 percent.

One-year Treasury-indexed ARMs averaged 5.63 percent this week, with an average 0.8 point, down from last week when it averaged 5.68 percent. At this time last year, the one-year ARM averaged 4.21 percent.

“Mortgage rates are down a little this week on news of disappointing job growth in May coupled with downward revisions for the previous two months,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The slight drop in long-term rates reflects a cautiously optimistic outlook in the market that core inflation remains contained. The soon-to-be released Producer Price Index (PPI), followed by the Consumer Price Index (CPI) will give a better indication which way inflation is headed.

“Currently, the Fed is monitoring each of these economic reports and will take their impacts into consideration at its next meeting towards the end of June, leaving open the question of what action, if any, the Fed will take.”

Source: Freddie Mac

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