McLEAN, VA -- In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 5.81 percent, with an average 0.7 point, for the week ending December 26, 2003, almost unchanged from 5.82 percent last week. Last year at this time, the 30-year FRM averaged 5.93 percent.

The average for the 15-year FRM this week is 5.13 percent, with an average 0.6 point, also almost unchanged from last week’s average of 5.14 percent. A year ago, the 15-year FRM averaged 5.32 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.73 percent this week, with an average 0.5 point, down from 3.77 percent last week. At this time last year, the one-year ARM averaged 4.01 percent.

“The economy is ending the year on a modest but upbeat tone. Interest rates cannot rise too quickly any time soon, because the inflation indicators have been declining. But interest rates cannot fall by too much either, because consumer spending is still quite strong. As a result, mortgage rates were virtually unchanged over this holiday week,” said Amy Crews Cutts, Freddie Mac deputy chief economist. “And for the year as a whole, interest rates for 30-year fixed-rate mortgages were the lowest since Freddie Mac began its survey in 1971.

“Using data from the Federal Housing Finance Board’s Monthly Interest Rate Survey, mortgage rates in 2003 averaged the lowest level since 1965. This should translates into a record year for total home sales and mortgage originations, according to Freddie Mac’s latest forecast. And with little upward pressure on interest rates in the foreseeable future, 2004 looks to be a favorable year for housing and mortgage markets as well.”

Published: December 26, 2003

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