30-year Fixed Rate Mortgage Statistics
This month, 30-year fixed-rate mortgage data from the Freddie Mac Primary Mortgage Market Survey (PMMS) is added to the Timber Industry Report, and will be reported regularly. According to the Freddie Mac website, the PMMS surveys about 125 lenders each week, representative of the level of mortgage business in each region of the country and the mix of lenders throughout each region – thrifts, credit unions, commercial banks and mortgage lending companies.
In 2008 Freddie Mac went through a major transformation at the board and top management levels, and continues under the conservatorship of the Federal Housing Finance Agency, due to its role in the collapsed housing market. Nonetheless, it continues its ongoing business operation of purchasing mortgages, securitizing them, and reselling them to investors. In addition, it continues to conduct reputable mortgage rate surveys, including a survey of 30-year Fixed Rate Mortgages, as it has since 1971.
The July 2006 interest rate of 6.76, exactly 3 years ago, is the highest mortgage rate reported since January 2002. Since July 2006, the rate had been fluctuating but gradually falling to a low of 4.81 in April 2009. The following table summarizes the history of interest rate changes since whole-year data has been kept by Freddie Mac – 1972.
INTEREST RATE CHANGES 1972-2009 (Freddie Mac PMMS)
| Period of Years Years | Range of Interest Rates | Mean Average |
| 2009 0.6 | 4.81-5.42 | 5.07 |
| 2008-2003 6 | 5.23-6.76 | 6.05 |
| 2002-2001 2 | 6.05-7.16 | 6.75 |
| 2000-1992 9 | 6.71-9.20 | 7.78 |
| 1991-1986 6 | 8.50-11.26 | 10.07 |
| 1985-1979 7 | 10.39-18.45 | 13.88 |
| 1978-1972 7 | 7.29-10.35 | 8.72 |
(To view the Primary Mortgage Market Survey data by month, copy and paste the following website to your search engine: http://www.freddiemac.com/pmms/pmms30.htm)
This table shows how very low the current rates are, not only currently, but since 2003, which fueled the recently past housing boom. Both the means and the ranges of interest rates have been steadily decreasing in the time periods above, since the 1979-1985 period. It was during the 1979-1985 period – in October 1981– the interest rate reached the recent all-time high of 18.45%. Of course, the rate of inflation measured by a change of the consumer price index was 10.3% at the time, and played a major role. In a few years, we will know if the current low interest rates signal a period of very low inflation or deflation.
The current low interest rates could not come at a better time, making it advantageous, from an interest payment standpoint, to borrow and buy a home. With the uncertainty of the near-term future of home value appreciation, these most favorable interest rates (since 1972) lower the cost of home ownership at a time when more homebuyers are most needed. In time, these attractive low interest rates should drive the home-sale economy forward, and the Oregon forest industry also.
© Copyright Rick Sohn, #2-8 Umpqua Coquille LLC. Email:rsohn@umpquacoquille.com
The PMMS data is cited with the permission of the source, Freddie Mac.
