The latest Primary Mortgage Market Survey (PMMS) released by Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) showed that the fixed mortgage rates are still hanging near 2014 lows driven by the October employment data.

Mortgage Rates Freddie Mac

Freddie Mac’s survey found that the fixed average mortgage rates were little changed last week. Lenders were offering an average of 4% for 30-year-fixed mortgages to solid borrowers.

Mortgage rates

The PMMS survey showed that mortgage lenders are offering an average of 4.01% for a 30-year fixed rate mortgage (FRM) during the week ending November 13, 2014. The rate declined last week’s average rate of 4.02%. During the same week a year earlier, the average 30-year FRM was 4.35%.

The average rate for the 15-year FRM for the week was 3.20%, down from 3.21% a week earlier. During the same period last year, the average 15-year FRM was 3.35%.

The 5-year Treasury-indexed hybrid adjustable –rate mortgage (ARM) was 3.02% for the week, up from 2.97%% last week. The average 5-year ARM was 3.01% last year.

The1-year Treasury-indexed ARM was 2.43% for the week, down from 2.45% last week. During the same time a year earlier, the average 1-year ARM was 2.61%.

Fixed mortgage rates slightly down on employment data

Frank Nothaft, vice president and chief economist at Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) commented, “Fixed mortgage rates were slightly down on mixed results from October’s employment report.”

Last week, the Department of Labor reported that the unemployment rate declined to 5.8% and American companies added 214,000 jobs last month. The agency said the unemployment rate dropped 0.8% and the number of unemployed people declined by 1.2 million since the beginning of 2014.

Nothaft noted that the number of jobs added last month was below the consensus estimate of economists.

Separately, a new research paper found that a reduction of 10% on mortgage payment decreases the percentage of expected defaults by 10% to 11%. The study also found that estimated impact of payment reduction is similar for borrowers with differing FICo credit scores, and relatively stronger for those with negative equity.

The results of the research was based on the analysis of the population of 30-year fixed rate borrowers with little or negative equity  that refinanced to 30-year fixed mortgage rates under the Home Affordable Refinance Program (HARP).