30-Year Rate Shatters Survey Record

The average 30-year fixed mortgage rate fell to a survey-record low of 5.45% for the week ending May 16 from 5.62% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The previous low was 5.61%, recorded earlier this year in the week ended March 14. (Freddie Mac began tracking the rate in 1971.) The average 15-year fixed mortgage rate fell from 4.97% to 4.84%, and the average rate for one-year Treasury-indexed adjustable-rate mortgages crept up from a survey-record low of 3.66% to 3.67%. Fees and points averaged 0.6 points for 30-year fixed-rate mortgages and ARMs and 0.7 points for 15-year FRMs. "Continued reaction to last week's Federal Reserve Committee statements about the threat of deflation has triggered a rally in the bond market, driving long-term yields to the lowest level since 1958," said Frank Nothaft, Freddie Mac's chief economist. ".... The Producer Price Index for April, released today, showed a considerably larger decline than had been expected, reaffirming market concerns about the state of the economy." A year ago, the average 30-year and 15-year fixed rates were 6.89% and 6.37%, respectively, and the average one-year ARM rate was 4.81%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.