Fixed mortgage rates held steady this week, although changes in pricing at one GSE have market participants bracing for an increase in rates in the near future. Freddie Mac (FRE) said Thursday that its weekly rate survey found that the 30-year fixed-rate mortgage averaged 6.52 percent with an average 0.7 point for the week ending August 7, unchanged from last week. Last year at this time, the 30-year FRM averaged 6.59 percent. While the traditional fixed-rate mortgage stayed put, rates on adjustable-rate mortgages floated downward ever-so-slightly. Five-year Treasury-indexed hybrid ARMs averaged 6.05 percent this week, with an average 0.6 point, down from last week when it averaged 6.07 percent. One-year Treasury-indexed ARMs averaged 5.22 percent this week with an average 0.6 point, five basis points from one week earlier. “The housing market is continuing to act as a drag on the economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Residential fixed investment subtracted 0.6 percentage points off second quarter growth in real GDP. “More recently, mortgage applications for home purchases in the past few weeks fell to the slowest pace since the week ending February 21, 2003, according to the Mortgage Bankers Association. Finally, although showing some initial signs of improvement, the inventory of unsold homes remains at historically high levels.” Sources that spoke with HW said that recent pricing changes and delivery charge increases at Fannie Mae (FNM) would likely hike mortgage rates in the weeks ahead, even if the pricing changes aren’t effective until October 1. “Lenders are going to start pricing this in right away, sort of like a stock market prices in future earnings,” said one source, a banking executive that asked not to be named in this story. As if to prove the point, Citi announced today that it had already increased its pricing to account for Fannie Mae’s new policy, according to Rob Chrisman, director of capital markets at Residential Pacific Mortgage. Chrisman, who posts the contents of an email he has sent to clients for years on the Mortgage News Clips blog, said that Citi had incorporated the new charge into its base pricing effective Wednesday. For more information, visit http://www.freddiemac.com. Disclosure: The author was long FRE when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

More: