By Amy Hoak
Rates on fixed-rate mortgages rose this week, as economic
reports were better than what forecasts had expected, Freddie Mac's
chief economist said Thursday.
"The economy slowed by 3.8% in the fourth quarter of 2008, less
than the market consensus, with inflationary pressures held at bay.
Meanwhile, personal incomes fell by only half as much as some
market forecasters predicted," said Frank Nothaft, Freddie Mac
chief economist, in a news release.
The 30-year fixed-rate mortgage averaged 5.25% for the week
ending Feb. 5, according to Freddie's weekly survey of conforming
mortgage rates. The mortgage averaged 5.10% last week, but is still
lower than a year ago, when it averaged 5.67%. Just three weeks
ago, the loan averaged a little under 5%.
Fifteen-year fixed-rate mortgages, a popular choice for
refinancing, averaged 4.92%, up from 4.80% last week. The mortgage
averaged 5.15% a year ago.
One-year Treasury-indexed adjustable-rate mortgages averaged
4.92%, up slightly from last week's 4.90% average. The ARM averaged
5.03% a year ago.
Only 5-year ARMs headed the other direction, averaging 5.26%
this week, down slightly from 5.27% last week. The ARM averaged
5.21% a year ago.
To obtain the rates, the fixed-rate mortgages required payment
of an average 0.8 point, the 5-year ARM required an average 0.6
point and the 1-year ARM required an average 0.5 point. A point is
1% of the mortgage amount, charged as prepaid interest.
Nothaft said that low rates and falling house prices have made
housing more affordable than it has been in 19 years.
"The National Association of Realtors monthly affordability
index rose to an all-time record high in December 2008 since
records began in January 1971," he said. "As a result, pending
existing home sales rose 6.3% in December 2008 and were up 2.1%
from the previous December."
In a separate survey released by the Mortgage Bankers
Association, applications for mortgages were up a seasonally
adjusted 8.6% last week, compared with the week before.
-Amy Hoak; 415-439-6400; AskNewswires@dowjones.com