Lower Treasury Yields Push Mortgage Rates Down Slightly This Week

McLean, VA Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.68 percent with an average 0.3 point for the week ending August 2, 2007, down from last week when it averaged 6.69. Last year at this time, the 30-year FRM averaged 6.63 percent.

The 15-year FRM this week averaged 6.32 percent with an average 0.3 point, down from last week when it averaged 6.37 percent. A year ago, the 15-year FRM averaged 6.27 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.29 percent this week, with an average 0.5 point, down from last week when it averaged 6.30 percent. A year ago, the 5-year ARM averaged 6.27 percent.

One-year Treasury-indexed ARMs averaged 5.59 percent this week with an average 0.5 point, down from last week when it averaged 5.69 percent. At this time last year, the 1-year ARM averaged 5.69 percent.

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

"Market investors seeking safety from the subprime fallout bought Treasury securities, pushing bond yields down and allowing mortgage rates to drift a bit lower," said Frank Nothaft, Freddie Mac vice president and chief economist. "Sales of new and existing homes fell in June, and prices continue to weaken, especially in the markets that had recorded the strongest gains over the past few years. There are early signs, however, that the market is stabilizing. As construction spending levels off, the drag on GDP growth will continue to diminish. Meanwhile, the 5 percent rise in pending home sales in June suggests that sales in July and August may reverse last month's decline."

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.

Source: Freddie Mac