Freddie Mac: Fixed Mortgage Rates Went Up Amid Weak Housing Data

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Freddie Mac: Fixed Mortgage Rates Went Up Amid Weak Housing Data
By User:AgnosticPreachersKid (Own work) [CC BY-SA 3.0], via Wikimedia Commons

The fixed mortgage rates went up this week following a rise in the 10-year treasury note and amidst a week of soft housing data, according to the Primary Mortgage Market Survey (PMMS) of Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).

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Mortgage rates

Based on the PMMS survey, lenders are offering borrowers an average of 4.33% for a 30-year fixed rate mortgage (FRM) during the week ending April 24, 2014. The rate increased by 0.6% from 4.27% average rate a week earlier. During the same week a year ago, the average 30-year FRM was 3.40%.

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For the 15-year FRM, the average rate for the week was 3.39%, an increase of 0.6% from 3.33% last week. The average FRM was 2.61% in the same period a year ago.

The 5-year Treasury-indexed hybrid adjustable –rate mortgage (ARM) was 3.03% this week. The rate was the same from last week. During the same period a year ago, the 5-year ARM rate was 2.58%.

Meanwhile, the 1-year Treasury-indexed ARM also remained at 2.44% this week. During the same time a year earlier, the average 1-year ARM was higher at 2.62%.

Existing home sales essentially flat in March

In a statement, Frank Nothaft, vice president and chief economist at Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) said, “Mortgage rates edged up following the uptick in the 10-year Treasury note late last week. Existing home sales were essentially flat with a 0.2% decline in March to a seasonally adjusted annual rate of 4.59 million. However, new home sales fell nearly 15% in March to an annual rate of 384,000; well below consensus.”

Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) conducts its PMMS survey every week from Monday until Wednesday to discover the rates lenders are offering to borrowers with good credit risks, 20% down payment and pay less than 1% of the loan amount in lender fees and discount points.

Economic and housing market outlook

Last week, Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) released its economic and housing market outlook for April, which showed mixed signals heading towards the spring home buying season.

The mortgage giant projected that new home construction will increase by 18% and home price appreciation will moderate to an annual growth rate of 5% this year.

Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reduced its home sales estimate from 5.6 million to 5.5 million for 2014 primarily because of a slower than normal first two months of the year, which caused a 4% decline in annual origination.

The mortgage giant also noted that the improvement in local employment situation (unemployment rate declining in 50 states) is helping the housing market.  Consumer confidence slightly declined due the increase in interest rates.

Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) expected that the 30-year FRM will continue to increase gradually and will end the year at around 5%.

Updated on

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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