McLean, VA – In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.88 percent, with an average 0.7 point, for the week ending February 8, 2002, down from 7.02 percent last week. Last year at this time, the 30-year FRM averaged 6.98 percent.

The average for the 15-year FRM this week is 6.36 percent, with an average 0.7 point, falling from last week's average of 6.51 percent. A year ago, the 15-year FRM averaged 6.60 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 5.04 percent this week, with an average 0.7 point, down from last week's average of 5.12 percent. This time last year, the one-year ARM averaged 6.45 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"As the economy continues to show signs that the recession is ending, the housing market continues to expand, thanks in large part to current low mortgage rates," said Frank Nothaft, Freddie Mac chief economist. "And as long as inflation is not an issue in the economy, lending rates should remain around 7 percent.

"Additionally, an unexpected the decline in jobless claims is another sign the recovery is underway. Indications are leaning heavily towards a healthy economy and low mortgage rates in 2002, which creates an atmosphere that is conducive to an on-going robust housing industry."

Summary Of Survey Results

Freddie Mac defines its regions as follows:

Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, PR, ME, NH, VT, MA, RI, CT, VI
Southeast: NC, SC, TN, KY, GA, AL, FL, MS
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU

Freddie Mac's Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS. Freddie Mac may change the methodology used to conduct the PMMS survey at any time and without notice.

DEFINITIONS

Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.

ARM Index - One-year Treasury

Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.

Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.

Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.

Weighted Averages for the PMMS have been adjusted as of October 11, 2001. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under the Home Mortgage Disclosure Act (HMDA) for 1999. The weights are listed in the table below.

SOURCE: Freddie Mac

Published: February 8, 2002

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