Mortgage Rates Fall Slightly

Today Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.26 percent with an average 0.6 point for the week ending July 17, 2008, down from last week when it averaged 6.37 percent. Last year at this time, the 30-year FRM averaged 6.73 percent.

The 15-year FRM this week averaged 5.78 percent with an average 0.6 point, down from last week when it averaged 5.91 percent. A year ago at this time, the 15-year FRM averaged 6.38 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.80 percent this week, with an average 0.6 point, down from last week when it averaged 5.82 percent. A year ago, the 5-year ARM averaged 6.35 percent.

One-year Treasury-indexed ARMs averaged 5.10 percent this week with an average 0.6 point, down from last week when it averaged 5.17 percent. At this time last year, the 1-year ARM averaged 5.72 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Mortgage rates fell this week amid market speculation that the Federal Reserve (Fed) may not raise the overnight bank-lending rate this year after all," said Frank Nothaft, Freddie Mac vice president and chief economist. "Some of the factors motivating the change in market perceptions this week included retail sales for June rising at the slowest pace since February and consumer sentiment in July holding at low levels not seen since 1980.

"In addition, in his July 15th semi-annual testimony before Congress, Fed chairman Bernanke indicated that the FOMC participants had considerable uncertainty surrounding their outlook for economic growth."