McLEAN, VA -- In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.12 percent, with an average 0.7 point, for the week ending May 6, 2004, up from last week when it averaged 6.01 percent. Last year at this time, the 30-year FRM averaged 5.62 percent.

The average for the 15-year FRM this week is 5.47 percent, with an average 0.7 point, up from last week when it averaged 5.35 percent. A year ago, the 15-year FRM averaged 4.97 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.76 percent this week, with an average 0.7 point, up from last week when it averaged 3.75 percent. At this time last year, the one-year ARM averaged 3.66 percent.

"A steady drip of good economic news coupled with the Federal Reserve's change of language in their statement this week reinforced market expectations that the Fed may raise rates sooner than expected," said Amy Crews Cutts, Freddie Mac deputy chief economist. "That expectation carried over into the housing sector causing a rise in mortgage rates for the seventh week in a row.

"In the meantime, employment numbers that will be released tomorrow will either confirm that last month's figures can be sustained, or it will show that the market got ahead of itself. Either way, there is too much volatility at the moment to say precisely where rates will be even as early as next week."

Published: May 7, 2004

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