Freddie Survey Shows Small Rate Increase

The current average interest rate for a 30-year fixed-rate mortgage is 5.42%, up slightly from 5.38% the previous week, according to the latest Freddie Mac Primary Mortgage Market Survey. However, the interpolated 30-year secondary market Fannie Mae mortgage-backed security current coupon yield that drives mortgage rates is still somewhat lower from where it was when it spiked earlier this month, according to Art Frank, director and head of mortgage-backed securities research at Deutsche Bank Securities. According to Freddie Mac, in the most recent week the average interest rate for a 15-year FRM fell slightly, the average five-year Treasury indexed hybrid rate inched up and the average rate for a one-year Treasury-indexed adjustable-rate mortgage inched down. Points averaged 0.7 for all mortgage types and all rates were lower than they were a year ago. "Mixed economic reports on the state of the housing market helped hold mortgage rates fairly flat this week," said Frank Nothaft, Freddie Mac vice president and chief economist. He noted that while the sales for the existing home market appear to be picking up, a slide in prices seems to be continuing. However, "the inventory of unsold homes has lessened from a year ago, which may help cushion further house price declines," Mr. Nothaft said.