U.S. Mortgage Rates Stay Steady

by Amy Lillard

Long-term mortgage rates increased slightly in the week ending September 6, 2007, according to finance company Freddie Mac. Their weekly Primary Mortgage Market Survey® was released Thursday.

"Over the past week, long-term mortgage rates were largely unchanged as the most recent economic news showed smaller increases than had been expected," said Frank Nothaft, Freddie Mac vice president and chief economist. "For instance, core personal consumption expenditure price index rose at an annualized rate of only 1.3 percent in the second quarter and July's consumer spending data showed a 1.9 percent gain in the core price index for the twelve months ending in July."

This week's survey indicates 30-year fixed mortgage rates averaged 6.46 percent, a boost from last week's average of 6.45 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 6.47 percent.

Fixed mortgage rates for 15-year terms averaged 6.15 percent, an increase from last week's average of 6.12. A year ago, the 15-year fixed-rate mortgage averaged 6.16 percent.

Averages for Treasury-indexed adjustable-rate mortgages (ARMs) bucked the trend and decreased this week. Five-year ARMs averaged 6.32 percent, down slightly from last week's average of 6.35 percent. At this time last year, the five-year ARM also averaged 6.14 percent.

One-year ARMs averaged 5.74 percent this week, a big drop from last week's average of 5.84 percent. Last year, the one-year ARM averaged 5.63 percent.
Freddie Mac said that to obtain these rates lenders charged an average 0.5-point fee for fixed-rate mortgages. Lenders charged a 0.6-point fee for ARMs.

"In other news, the most recent Conventional Mortgage Home Price Index (CMHPI) release issued by Freddie Mac reported that on average, national house prices grew by 0.1 percent in the second quarter, the slowest quarterly house price growth since the fourth quarter of 1994," said Nothaft. "For the past 12 months, house prices appreciated 3.3 percent, the slowest rate in 10 years."

Freddie Mac is a mortgage finance company established by Congress in 1970. The company buys mortgages and mortgage-related securities and packages them to sell to investors or to hold in its own portfolio. They release their summary of average mortgage rates weekly.


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