Record Low Mortgage Rates Continue; Increases Expected Soon

AVONDALE, AZ – February 19, 2010 – The Federal Home Loan Mortgage Corp., known as Freddie Mac, released the latest results of its weekly Primary Mortgage Market Survey showing that the 30-year, fixed rate mortgage finance rate averaged 4.93 percent with an average 0.7 point for the week ending Feb. 18, 2010,down from last week’s average of 4.97 percent, maintaining historic lows in home financing rates. One year ago the average 30-year rate surveyed by Freddie Mac was 5.04%. The record low 30-year rate reported by Freddie Mac since its inception in 1970 was 4.71%, posted in early December 2009. Officials of The www.naeba.org/index.asp (NAEBA) said these rates make home purchasing more affordable to millions of Americans, however the association warned that all indications are that rates will begin to rise later this spring. “The Federal Reservelaunched a program last year with $1.25 trillion designated to buy up mortgage securities, adding a great deal of liquidity to the mortgage market and keeping rates low,” said Kimberly Kahl, NAEBA’s Executive Director. “However, that program is scheduled to run out at the end of March and most observers, including NAEBA, believe that rates will go up as a result. There’s a small chance that the Fed will extend the program, but to date there’s been no definitive word on that.” Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. In the latest Freddie Mac mortgage rate survey, the 15-year FRM this week averaged 4.33 percent with an average 0.6 point, down from last week when it averaged 4.34 percent. A year ago at this time, the 15-year FRM averaged 4.68 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.12 percent this week, with an average 0.5 point, down from last week when it averaged 4.19 percent. A year ago, the 5-year ARM averaged 5.04 percent. The 1-year Treasury-indexed ARM averaged 4.23 percent this week with an average 0.6 point, down from last week when it averaged 4.33 percent. At this time last year, the 1-year ARM averaged 4.80 percent. “Mortgage rates eased for the second week, while economic data releases suggest that the housing market may be in a slow state of recovery,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The National Association of Realtors® (NAR) reported that existing home sales rose in 48 states and the District of Columbia between the third and fourth quarters of 2009; 32 states experienced double-digit growth. In addition, 67 metropolitan areas saw positive annual house price growth in the fourth quarter, more than double that in the third quarter, according to the NAR. “New home construction is also slowly improving. One-family housing starts rose to an annual pace of 484,000 homes in January, which is up almost 36 percent from January 2009, based on the U.S. Census figures. Moreover, homebuilder assessments of market conditions over the first half of 2010 improved in February, according to National Association of Homebuilders/Wells Fargo Housing Market Index.” In another mortgage survey, conducted weekly by Bankrate.com, the nation’s large mortgage lenders reported 30-year fixed mortgage rates at 5.11% for the week ended February 17, 2010, down 0.04% from the previous week. Rates for 15-year fixed mortgages and 5-year ARMs were both reported at 4.51%, reflecting decreases for both categories from the week before. In releasing its weekly data, Bankrate.com officials said that mortgage rates could increase to over 6% by the end of the year due to a combination of the Fed ending its mortgage investment program, growth in the overall economy and an expected recovery, however slight, in the nation’s housing market. NAEBA was established in 1995 by real estate agents who recognized the need to establish guidelines to protect the best interests of buyers in home purchasing transactions. The association maintains a rigorous list of membership requirements, including Certified Exclusive Buyer Agent certification, ongoing education, and state-by-state knowledge bases that ensures each NAEBA agent is an expert in both national and local real estate laws, markets and practices. For more information about NAEBA and to find a NAEBA agent locally, visit the association’s website at www.naeba.org, use its Find An Agent Form,  or call the NAEBA Referral Service at 800-986-2322.