Long Term Mortgage Rates Down

Today Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.47 percent with an average 0.7 point for the week ending August 21, 2008, down from last week when it averaged 6.52 percent. Last year at this time, the 30-year FRM averaged 6.52 percent.

The 15-year FRM this week averaged 6.00 percent with an average 0.7 point, down from last week when it averaged 6.07 percent. A year ago at this time, the 15-year FRM averaged 6.18 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.99 percent this week, with an average 0.6 point, down from last week when it averaged 6.02 percent. A year ago, the 5-year ARM averaged 6.34 percent.

One-year Treasury-indexed ARMs averaged 5.29 percent this week with an average 0.5 point, up from last week when it averaged 5.18 percent. At this time last year, the 1-year ARM averaged 5.60 percent.

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

"Even with the current historically affordable mortgage rates, news continues to show signs of weakening in the housing sector," said Frank Nothaft, Freddie Mac vice president and chief economist. "For example, housing starts fell to 0.965 million units (annualized) in July, the slowest pace since March 1991. As a result, homebuilder confidence remained at an all-time record low in August since the series began in January 1985.

"Next week, market watchers will be looking to the release of house price indices from S&P/Case-Shiller, OFHEO and Freddie Mac for signs of whether home prices may be slowing their descent as recent monthly indices have shown, or whether the observed deceleration was temporary."