Freddie Mac, Bankrate see rates falling, rising

By Palm Beach Business.com

DELRAY BEACH — A mixed decision this week on interest rates.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage  averaging 4.80 percent this week, down from last week when it averaged 4.82 percent. The 30-year comes with an average of 0.7 point.

Last year at this time, the 30-year FRM averaged 6.03 percent.

Meanwhile Bankrate.com’s weekly survey put the average 30-year at 5.23 percent, with 0.47 point.

Other rates from Freddie Mac: The 15-year averages 4.48 percent with an average 0.7 point, unchanged from last week. It’s the lowest the 15-year has been since Freddie Mac began tracking it in August 1991.

Five-year adjustable-rate mortgages averaged 4.85 percent this week, with an average 0.6 point, down from last week’s 4.88 percent. One-year ARMs averaged 4.82 percent with an average 0.4 point, down from last week when it averaged 4.91 percent.

"Although long-term mortgage rates eased slightly this week, ARM rates remain elevated relative to those fixed-rate mortgages," said Frank Nothaft, Freddie Mac vice president and chief economist. "For instance, interest rates for 1-year ARMs exceeded those for 30-year fixed-rate mortgages over the last two weeks; this is the first time this has happened since Freddie Mac began collecting data for ARMs in January 1984.”

Other results from the Bankrate survey: The average 15-year fixed rate mortgage rose to 4.76 percent, while the average jumbo 30-year fixed rate dropped sharply to 6.52 percent. Adjustable rate mortgages were all over the map, with the average 1-year ARM rising to 5.32 percent while the 5/1 ARM retreated to 5.11 percent.

Mortgage rates have been comparatively tame in recent weeks, but one exception has been the jumbo mortgage market, according to Bankrate.

Jumbo mortgages, those too large to be purchased or guaranteed by Fannie Mae and Freddie Mac, carry higher rates than smaller, conforming loans that do carry such guarantees. And since the onset of the credit crunch, the differential in rates has been significantly larger, well above 100 basis points instead of the typical pre-credit crunch level of 25 basis points. But jumbo mortgage rates have fallen to a two-year low of 6.52 percent, down from 6.76 percent two weeks ago and 6.99 percent on March 11.

The rates are still higher than they would be in a normal credit environment, but with the slowly thawing credit markets the spread between conforming and jumbo rates has narrowed to levels last seen in Nov. 2008.

Bankrate’s panel of mortgage experts expect rates to stay the same, or fall, over the next 30 to 45 days. Half of the panelists expect mortgage rates to remain more or less unchanged. Nearly one in three, or 31 percent, predict mortgage rates will decline while only 19 percent of the respondents forecast an increase in mortgage rates.