Freddie Mac: Weekly Rates Followed Bond Yields to Higher Levels

Most mortgage interest rates rose during the week ended February 25 according to data released on Thursday by Freddie Mac from its Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage (FRM) averaged 5.05 percent during the week, up from 4.93 the previous week.  Fees and points were unchanged at 0.7 point.  The 15-year FRM was up 7 basis points to 4.40 percent and fees and points increased from 0.6 to 0.7 point.

Adjustable rate mortgages (ARMs) were mixed with the five-year Treasury-indexed hybrid ARM up from 4.12 percent with 0.5 point to 4.16 percent with 0.6 point.  The one-year Treasury-indexed hybrid ARM, however, declined from 4.23 percent to 4.15 percent.  Average fees and points for 1-year ARMS remained at 0.6 point.  

Frank Nothaft, Freddie Mac vice president and chief economist said, in a statement accompanying the rate release, "Interest rates for 30-year fixed mortgages followed long-term bond yields higher and rose above 5 percent this week amid a mixed set of economic data reports.  For instance, the January producer price index jumped well above the market consensus, but the consumer price index remained subdued and consumer confidence declined to the lowest level since April 2009, according to the Conference Board.

"There were also varying reports as to the current state of the housing market. The S&P/Case-Shiller® national home price index rose for the third consecutive quarter in the fourth quarter, albeit at a slower rate, and the 20-city composite index showed an increase in December 2009 for the seventh month in a row; six metropolitan areas experienced positive year-over-year growth, compared to four in November. New home sales, however, unexpectedly slowed in January to the smallest pace since records began in 1963, and the supply of homes at the current sales rate rose to 9.1 months, the most since May 2009."

Fannie Mae's report on average weekly yields for the week ended February 19 showed the same pattern as that reported by Freddie Mac; long term rates were up while ARMs drifted lower.

Fannie Mae's yield on conventional 30-year FRMs averaged 4.82 percent for  the week compared to 4.71 a week earlier while the 15-year FRM increased from 4.04 percent to 4.11 percent.  FHA and VA guaranteed 30-year mortgages increased 10 basis points to 5.49 percent.  The one-year ARM averaged 2.46 percent compared to 2.47 percent a week earlier. 

All Fannie Mae yields are quoted on a net basis with no servicing fees included.