Weak Economic Report Drives Mortgage Rates Down

Freddie Mac today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.03 percent with an average 0.5 point for the week ending March 6, 2008, down from last week when it averaged 6.24 percent. Last year at this time, the 30-year FRM averaged 6.14 percent.

The 15-year FRM this week averaged 5.47 percent with an average 0.5 point, down from last week when it averaged 5.72 percent. A year ago at this time, the 15-year FRM averaged 5.86 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.34 percent this week, with an average 0.5 point, down from last week when it averaged 5.43 percent. A year ago, the 5-year ARM averaged 5.90 percent.

One-year Treasury-indexed ARMs averaged 4.94 percent this week with an average 0.5 point, down from last week when it was 5.11 percent. At this time last year, the 1-year ARM averaged 5.47 percent

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

"Weak economic reports that indicated declines in the job market, slowing in manufacturing and low consumer confidence drove bond yields lower this week and mortgage rates followed," said Frank Nothaft, Freddie Mac vice president and chief economist. Interest rates for 30-year fixed-rate mortgages are now at the same levels as they were two weeks ago, erasing last week's upward jump.

"Meanwhile, the housing market continues to take a toll on the rest of the economy. Residential fixed investment shaved 1.25 percentage points off economic growth in the fourth quarter of 2007. More recently, the median sales price of new homes fell 15.1 percent in January, representing the largest annual drop on record. Residential construction fell 19.7 percent over the twelve-months ending January 2008, the largest decline since March 2007."