McLEAN, VA -- In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.45 percent, with an average 0.6 point, for the week ending May 16, 2003, slipping from 5.62 percent last week. Last year at this time, the 30-year FRM averaged 6.89 percent.

The average for the 15-year FRM this week is 4.84 percent, with an average 0.7 point, down from last week's average of 4.97 percent. A year ago, the 15-year FRM averaged 6.37 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.67 percent this week, with an average 0.6 point, down from last week's average of 3.74 percent. At this time last year, the one-year ARM averaged 4.81 percent.

"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 Freddie Mac chief economist Frank Nothaft. "When that happens, mortgage rates are bound to drop and indeed, that is just what they did this week."

"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. However, the Consumer Price Index for April that will come out tomorrow will give us a much more comprehensive picture of what is actually happening."

Published: May 16, 2003

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