Freddie Mac: Rates stay tame through summer

Hold steady three weeks straight

Fixed mortgage rates posted little movement for the week ended Sept. 4 amid light economic reports, according to the latest Freddie Mac Primary Mortgage Market Survey.

The 30-year, fixed-rate mortgage averaged 4.10%, unchanged from last week, but down from 4.57% a year ago.

In addition, the 15-year, fixed-rate mortgage came in at 3.24%, down from 3.25% a week prior and 3.59% last year.

The 5-year Treasury-index hybrid adjustable-rate mortgage remained unchanged at 2.97%, but is down from 3.28% a year ago.

The 1-year Treasury-index ARM averaged 2.40%, slightly up from 2.39% a week ago but down from 2.71% last year.

“Mortgage rates were little changed amid a week of light economic reports. Of the few releases, the ISM’s manufacturing index rose to 59.0 in August from 57.1 the previous month. This was the highest reading of the index since March 2011,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

Bankrate posted similar results, with the 30-year, FRM increasing to 4.24% from 4.23%.

The 15-year, FRM fell to 3.37% from 3.38% a week ago, while the 5/1 ARM dipped to 3.25%, down from 3.32% last week.

“Movements in mortgage rates have been very tame all summer, with rates fluctuating within a band of just one-eighth of a percentage point since mid-May. But at some point, that will come to an end. If we get another upbeat jobs report this week, the bond market could begin to realize that higher interest rates are an eventuality, leading mortgage rates higher,” Bankrate said. 

Home price decline not as severe as once reported

Case-Shiller revises data

Now that the economy has had seven years to digest the financial crisis, the real impact of the recession might not be as bad as it appeared, according to an article inBloomberg.

The article explained that property values nationally only fell 26% from the February 2007 peak to the December 2011 trough, not 34% as previously reported, revised data shows.

Meanwhile, the index will now be issued monthly rather than quarterly.      

The change is the result of CoreLogic’s $6 million purchase of the S&P/Case-Shiller index from technology company Fiserv Inc. in March 2013. Case-Shiller has spent more than a year retrofitting its model with CoreLogic’s bigger, higher-quality data set, leading to a change in how the index looks.

The index has always measured repeat, arm’s-length transactions. Transfers of ownership such as bank repossessions are thrown out and the value of those foreclosed properties are captured later, when they’re sold. That ensures that sales of distressed properties aren’t counted twice, Case-Shiller principal economist David Stiff said.