It's a Great Time to Buy: Mortgage Rates Remain at Historic Lows

MORTGAGE RATES FLAT THIS WEEK THANKS MAINLY TO ACTIONS BY TREASURY AND THE FED

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 4.82 percent with an average 0.7 point for the week ending May 21, 2009, down from last week when it averaged 4.86 percent. Last year at this time, the 30-year FRM averaged 5.98 percent.
The 15-year FRM this week averaged 4.50 percent with an average 0.7 point, down from last week when it averaged 4.52 percent. A year ago at this time, the 15-year FRM averaged 5.55 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.79 percent this week, with an average 0.6 point, down from last week when it averaged 4.82 percent. A year ago, the 5-year ARM averaged 5.61 percent.

One-year Treasury-indexed ARMs averaged 4.82 percent this week with an average 0.6 point, up from last week when it averaged 4.71 percent. At this time last year, the 1-year ARM averaged 5.24 percent.

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

"Long-term fixed-rate mortgage rates have remained below 5.0 percent for the past 10 weeks as the U.S. Treasury and Federal Reserve (Fed) act to keep interest rates low through security purchases," said Frank Nothaft, Freddie Mac vice president and chief economist. "The Treasury purchased $136 billion in mortgage-backed securities through April and the Fed bought $740 billion through mid-May. In addition, the Fed purchased $115 billion in Treasury bonds since March of this year.

"Housing construction continued to decline, as total starts fell to the lowest level since the Census Bureau began its monthly series in January 1959. While single-family construction appears to be near or at a bottom, multi-unit construction continued to recede. Reflecting the apparent stabilization in single-family construction levels, homebuilder confidence rose in May to the highest level since September 2008 and represented the first back-to-back up tick since February 2008."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

DEFINITIONS
Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.

ARM Index - is the One-year Treasury
Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.
Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.
Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.

Weighted Averages for the Primary Mortgage Market Survey have been adjusted as of October 16, 2008. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under Home Mortgage Disclosure Act (HMDA) for 2007.