Rates Decline on 30-Year Fixed Rate Mortgages

According to Freddie Mac’s Primary Mortgage Market Survey released yesterday the 30-year fixed rate mortgage rates fell for a fifth straight week to its lowest level since February 2008.

The 15-year FRM this week averaged 5.35 percent with an average 0.6 point, down from last week when it averaged 5.54 percent. A year ago at this time, the 15-year FRM averaged 5.98 percent. The last time the 15-year FRM was lower was the week ending March 27, 2008, when it averaged 5.34 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.67 percent this week, with an average 0.7 point, down from last week when it averaged 5.87 percent. A year ago, the 5-year ARM averaged 6.21 percent.

The survey also shows one-year Treasury-indexed ARMs averaged 5.03 percent this week with an average 0.5 point, down from last week when it averaged 5.21 percent. At this time last year, the 1-year ARM averaged 5.65 percent.

“Interest rates for 30-year fixed-rate mortgages fell for the 5th consecutive week, amounting to a total decline of about 0.75 percentage points,” said Frank Nothaft, Freddie Mac vice president and chief economist.

As a result, mortgage applications surged nearly 58 percent since August 15th, largely led by a 122 percent gain in applications for refinancing, according to the Mortgage Bankers Association (MBA). The MBA also reported that fixed-rate mortgages are currently the predominant choice among homebuyers and families looking to refinance. Over the first two weeks of September, 95 percent of new applications were for fixed-rate mortgages. Since the end of 2007, the number of ARM applications fell by almost 50 percent.