by Calculated Risk on 5/20/2010 02:45:00 PM

From Freddie Mac: Long- and Short-Term Mortgage Rates Fall Again This Week

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.84 percent with an average 0.7 point for the week ending May 20, 2010, down from last week when it averaged 4.93 percent. Last year at this time, the 30-year FRM averaged 4.82 percent. Once again, the 30-year FRM has not been lower since the week ending December 10, 2009, when it averaged 4.81 percent.

The record low was 4.71% for the week of Dec 3, 2009 (series started in 1971).

The decline in mortgage rates is being driven by the decrease in the Treasury yield. The Ten Year treasury yield is currently at 3.26%.

Click on graph for larger image in new window.

This graph shows the 30 year mortgage rates from the Freddie Mac survey, and the ten year Treasury yields, since January 2008.

The spread between the two series has widened slightly since the program ended.

From Bloomberg:

The difference between yields on the Fannie Mae securities and 10-year Treasuries widened 0.03 percentage point to 0.81 percentage point, Bloomberg data show. The spread reached 0.59 percentage point on March 29, the lowest on record ... The gap climbed to 0.86 percentage point May 6, after holding near that low in April.

As an aside, the euro has strengthened a little and is close to 1.26 dollars today - up from 1.23 yesterday.