Mortgage Rates Plummet...Long Term Ones

Freddie Mac today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage averaged 5.87 percent with an average 0.5 point for the week ending March 20, 2008, down from last week when it averaged 6.13 percent. Last year at this time, the 30-year FRM averaged 6.16 percent.

The 15-year FRM this week averaged 5.27 percent with an average 0.5 point, down from last week when it averaged 5.60 percent. A year ago at this time, the 15-year FRM averaged 5.90 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.56 percent this week, with an average 0.9 point, down from last week when it averaged 5.58 percent. A year ago, the 5-year ARM averaged 5.91 percent.

One-year Treasury-indexed ARMs averaged 5.15 percent this week with an average 0.8 point, up from last week when it was 5.14 percent. At this time last year, the 1-year ARM averaged 5.40 percent

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

"Mortgage rates fell this week as various actions were taken to improve market liquidity," said Frank Nothaft, Freddie Mac vice president and chief economist. "In addition, the inflation report from the Consumer Price Index (CPI) reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI did not report a monthly increase since November 2006.

"Meanwhile, retail sales fell by 0.6 percent in February, contrary to the consensus forecast of a 0.2 percent increase, signaling that the condition of the economy might be weaker than previously thought. Slowing consumer spending and weak employment conditions are among the concerns behind the Fed's decision to lower the target federal funds rate by 0.75 percentage points in the most recent Federal Open Market Committee meeting."