McLEAN, VA -- In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.34 percent, with an average 0.7 point, for the week ending August 8, 2003, up sharply from 6.14 percent last week. Last year at this time, the 30-year FRM averaged 6.31 percent. This is the highest this figure has been since the week ending August 2, 2002, when the 30-year FRM averaged 6.43 percent.

The average for the 15-year FRM this week is 5.66 percent, with an average 0.7 point, up from last week's average of 5.44 percent. A year ago, the 15-year FRM averaged 5.69 percent. This is the highest this figure has been since the week ending October 25, 2002, when it averaged 5.70 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.80 percent this week, with an average 0.7 point, up from last week's average of 3.68 percent. At this time last year, the one-year ARM averaged 4.37 percent. This is the highest this figure has been since the week ending April 4, 2003, when it averaged 3.80 percent.

"Signs that the economy is finally improving has generated upward pressure on fixed-rate mortgage rates over these past few weeks," said Frank Nothaft, Freddie Mac's chief economist. "Although the 1-year ARM rate rose this week, the spread between the 1-year ARM and the 30-year FRM reached its widest peak since 1986.

"And the spread could conceivably widen even more if long-term mortgage rates go up further, making ARMs even more attractive."

Published: August 8, 2003

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