Thursday, January 27, 2005

American Bubble Fuel TM continues to fly off store shelves and find its way into a home near you.
Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 5.66 percent, with an average 0.6 points, for the week ending January 27, 2005, down slightly from last week when it averaged 5.67 percent. Last year at this time, the 30-year FRM averaged 5.68 percent.

The average for the 15-year FRM this week is 5.14 percent, with an average 0.6 points, down from last week when it averaged 5.15 percent. A year ago, the 15-year FRM averaged 4.97 percent.

Five-Year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.02 percent this week, with an average 0.6 points, down from 5.05 last week. There is no historical information for last year since Freddie Mac began tracking this mortgage rate at the start of this year.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.18 percent this week, with an average 0.6 points, up from last week when it averaged 4.11 percent. At this time last year, the one-year ARM averaged 3.59 percent.
The 30-year FRM is down 11 basis points on the year and the 15-year FRM is down 7 points. However, the one-year ARM seems to be lacking in bubble fuel, now up 8 basis points on the year. Put this together with the marked rise in rates on all US treasuries with maturity at three years or less -- the kind of notes John Snow loves to issue best -- and one might be tempted to say that the Asian central banks' interest in short-term US securities is, at these low returns, waning a bit. A big sign will be if the one-year ARM jumps above 4.2%, something it has done just once since late 2002.

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