McLEAN, VA -- Freddie Mac (NYSE:FRE) released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 5.77 percent, with an average 0.8 points, for the week ending September 2, 2004, down from last week when it averaged 5.82 percent. Last year at this time, the 30-year FRM averaged 6.32 percent.

The average for the 15-year FRM this week is 5.15 percent, with an average 0.7 points, also down from last week when it averaged 5.21 percent. A year ago, the 15-year FRM averaged 5.66 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.97 percent this week, with an average 0.8 point, down more from last week when it averaged 4.05 percent. At this time last year, the one-year ARM averaged 3.88 percent.

"The drop in consumer confidence left an unsavory taste in the market, creating a fear that consumer spending will slow," said Frank Nothaft, Freddie Mac vice president and chief economist. "Because consumer spending constitutes about 2/3 of the economy, this could seriously impact economic growth. As a result, interest rates tend to retreat to lower levels.

"August employment figures are due out tomorrow and those numbers will shed more light on the future financial strength or weakness of families. And that strength or weakness is a large part of what will drive the pace of the nation’s economic growth."

Published: September 3, 2004

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