If I could sum up my reaction to this week’s Primary Mortgage Market Survey from Freddie Mac into a one word, it would be “shocked.”
Better yet, I’m thinking more along the lines of “flabbergasted.” That’s it – I was flabbergasted when I saw today’s numbers and noticed that the nationwide average for mortgage rates dropped all across the board.
Back on January 5, 2012, the first PMMS report of the year, we were all blown away when 30-year fixed mortgage rates averaged 3.91%, and 15-year fixed mortgage rates averaged 3.23%. Wait until you see the numbers from this week.
30-year fixed mortgage rates took a nosedive south this week and shattered the previous record low, dropping to 3.40% with 0.6 points, from last week’s 3.49% with 0.6 points. For all you mathematicians out there, this means 30-year fixed mortgage rates have dropped a massive 0.15% over the past two weeks. Last year at this time, 30-year fixed mortgage rates averaged 4.01%.
15-year fixed mortgage rates also fell to a new record low this week by dropping to 2.73% with 0.6 points, from last week’s 2.77% with 0.6 points. This is an insanely low rate here, people. 12 months ago, 15-year fixed mortgage rates averaged 3.28%.
5/1-year ARMs fell to 2.71% with 0.6 points, from last week’s 2.76% with 0.6 points, and 1-year ARMs broke a three-week-long plateau of 2.61% by taking a significant fall to 2.60% with 0.4 points.
Last year at this time, 5/1-year and 1-year ARMs averaged 3.02% and 2.83%, respectively.
So what did Frank Nothaft, vice president and chief economist of Freddie Mac, have to say this week? The past couple weeks, he’s been less than enthused, but this week, he has to be elated and excitable, right? Let’s see.
He explained, “Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve’s purchases of mortgage securities, and should support an already improving housing market. For instance, the S&P/Case-Shiller 20-city home price index rose 1.2 percent over the 12 months ending in July, reflecting the largest annual increase since August 2010. Moreover, 16 of the cities saw positive growth, led by Phoenix’s 16.6 percent gain. Additionally, new home sales in July and August had the strongest two-month pace since March and April 2010.”
On a scale from 1 to a 7-year-old opening up their birthday gifts, Frank reacted like a dog getting a new rawhide bone.
Now, people, is the time to listen to my advice and make this happen!