Rates Fall; Hybrid ARM Tracking Begins

The average 30-year fixed mortgage rate fell to 5.77% for the week ending Jan. 7 from 5.81% the previous week, according to Freddie Mac's Primary Mortgage Market Survey.The average 15-year fixed mortgage rate fell from 5.23% to 5.21%, while the average rate for one-year Treasury-indexed ARMs declined from 4.19% to 4.10%. In addition, Freddie Mac has begun reporting rates for five-year Treasury-indexed hybrid ARMs, which averaged 5.03%. Fees and points averaged 0.7 of a point for 30-year FRMs and one-year ARMs, 0.6 of a point for 15-year FRMs, and 0.5 of a point for five-year hybrid ARMs. "Economic news seems to reflect steady growth and low inflation, placing little upward pressure on interest rates," said Amy Crews Cutts, Freddie Mac's deputy chief economist. She said the 5/1 ARM rates were added to the survey because "our annual ARM survey confirmed that the market for hybrid ARM products has grown large enough for us to track the direction this market segment is taking." (See item below.) A year ago, the average 30-year and 15-year fixed rates were 5.85% and 5.15%, respectively, and the average one-year ARM rate was 3.72%, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.