McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 5.87% with an average 0.5 point for the week ending March 20, 2008, down from last week when it averaged 6.13%. Last year at this time, the 30-year FRM averaged 6.16%.
"Mortgage rates fell this week as various actions were taken to improve market liquidity," said Frank Nothaft, Freddie Mac vice president and chief economist. "In addition, the inflation report from the Consumer Price Index (CPI) reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI did not report a monthly increase since November 2006.
Comment: Mortgage rates have come down by almost a full percentage point in the last 9 months, from 6.74% to 5.87%, a drop of .87%. For a $200,000 fixed-rate mortgage, that's a $113.43 monthly savings. Falling interest rates, along with falling home prices, will certainly be important factors in the real estate recovery process.