McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.14 percent with an average 0.5 point for the week ending March 8, 2007, down from last week when it averaged 6.18 percent. Last year at this time, the 30-year FRM averaged 6.37 percent.

The 15-year FRM this week averaged 5.86 percent with an average 0.5 point, down from last week when it averaged 5.92 percent. A year ago, the 15-year FRM averaged 6.00 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.90 percent this week, with an average 0.5 point, down from last week when it averaged 5.93 percent. A year ago, the 5-year ARM averaged 6.03 percent.

One-year Treasury-indexed ARMs averaged 5.47 percent this week with an average 0.6 point, down from last week when it also averaged 5.49 percent. At this time last year, the 1-year ARM averaged 5.45 percent.

"Mortgage rates slid further in the past week to the lowest level this year, as volatility in overseas stock markets led to questions about implications for the US economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Uncertainties about the strength of the economy dominated the effects of other indicators, such as January’s personal income growth and core inflation rate measured through the personal consumption report. Both increased at rates faster than had been expected, and potentially would have put upward pressure on interest rates. But the flight to quality due to the stock market’s fall pushed bond yields down instead."

"Looking ahead, as excess business inventories are worked off and the drag from residential investment diminishes, we expect real GDP growth to accelerate in the first half of 2007 to 2.6 percent and average 3 percent for the year. That considered, we do not foresee significant movements in mortgage rates, with rates on 30-year fixed-rate mortgages averaging between 6.3 and 6.4 percent for the remainder of the year."

Published: March 9, 2007

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