Economists Continue To Forecast A Rosy Outlook For The Housing Market

RealtyTimes
Freddie Mac today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.77 percent, with an average 0.5 point, for the week ending August 25, 2005, down a little from last week when it averaged 5.80 percent. Last year at this time, the 30-year FRM averaged 5.82 percent.

The average for the 15-year FRM this week is 5.35 percent, with an average 0.6 point, down from last week when it averaged 5.40 percent. A year ago, the 15-year FRM averaged 5.21 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.30 percent this week, with an average 0.6 point, down from last week when it averaged 5.34 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.

One-year Treasury-indexed ARMs averaged 4.56 percent this week, with an average 0.7 point, down slightly from last week when it averaged 4.58 percent. At this time last year, the one-year ARM averaged 4.05 percent.

"New home sales hit a record in July while existing home sales were at the third highest level they have ever been," said Frank Nothaft, vice president and chief economist at Freddie Mac. "There is no doubt that low mortgage rates have been the driver of this phenomenal housing market."

"Although mortgage rates slipped a little again this week, I do see rates trending upward over the year. As rates rise, housing sales will undoubtedly start to slow, but that slowdown will come from record levels. I think it safe to say that the housing industry will remain a formidable force in the national economy for the foreseeable future."