U.S. Mortgage Rates Make Small Movements

by Amy Lillard

Rates stayed steady for mortgages in the week ending July 19, 2007, according to finance company Freddie Mac. Their weekly Primary Mortgage Market Survey® was released Thursday.

"In a week marked by stock indexes reaching new highs on Wall Street, mortgage rates lingered near the previous week's level as the latest economic indicators did not affect inflation expectations significantly," said Frank Nothaft, Freddie Mac vice president and chief economist. "June's core producer price index inched up higher than market expectations, pushing the year-over-year growth rate to 1.8 percent, while the core consumer price index held steady at a 2.2 percent annual growth rate.
This week’s survey indicates 30-year fixed mortgage rates averaged 6.73 percent, unchanged from last week’s average of 6.73 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 6.80 percent.

Fixed mortgage rates for 15-year terms averaged 6.38 percent, a slight drop from last week's average of 6.39. A year ago, the 15-year fixed-rate mortgage averaged 6.41 percent.

Averages for some adjustable-rate mortgages (ARMs) also posted minimal changes this week. Five-year ARMs averaged 6.35 percent this week, unchanged from last week's average of 6.35 percent. At this time last year, the five-year ARM averaged 6.36 percent.

One-year ARMs averaged 5.72 percent this week, up slightly from last week's average of 5.71 percent. Last year, the one-year ARM averaged 5.80 percent.

Freddie Mac said that to obtain these rates lenders charged an average 0.4-point fee for fixed-rate mortgages, and a 0.5-point fee for ARMs.

“The most recent statistics suggest that the housing market has yet to reach a trough,” said Nothaft. “Although June's housing starts unexpectedly rose to 1.47 million units, construction of one-unit houses still saw a decline of 0.2 percent: At 1.15 million units, it was the slowest pace since January. Building permits fell by 7.5 percent last month to the lowest level since June 1997."

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.