McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey^SM (PMMS^SM) in which the 30-year fixed-rate mortgage (FRM) averaged 6.21 percent, with an average 0.5 point, for the week ending January 6, 2006, down very slightly from last week's average of 6.22 percent. Last year at this time, the 30-year FRM averaged 5.77 percent.

The average for the 15-year FRM this week is 5.76 percent, with an average 0.5 point, unchanged from last week's average of 5.76 percent. A year ago, the 15-year FRM averaged 5.21 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.78 percent this week, with an average 0.7 point, down very slightly from last week when it averaged 5.79 percent. A year ago, the five-year ARM averaged 5.03 percent.

One-year Treasury-indexed ARMs averaged 5.16 percent this week, with an average 0.7 point, up very slightly from last week when it averaged 5.15 percent. At this time last year, the one-year ARM averaged 4.10 percent.

"Financial markets paused this week, trying to decipher the December minutes of the Federal Reserve's monetary policy committee, which seemed to hint that the Fed might slow the pace of rate hikes in 2006," said Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, mortgage rates were little changed this week. Interest rates for 30-year fixed-rate mortgages currently are below the monthly averages set in November and December of 2005."

"The interest rate savings between 30-year fixed-rate mortgages and 1-year adjustable-rate mortgages fell about 0.6 percentage points to around one percentage point since the same time last year. This will likely slow ARM lending activity in 2006. Today, ARMs account for about 30 percent of new loans. We forecast that share to fall to around 25 percent by the end of 2006."

Published: January 6, 2006

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