Federal Home Loan Mortgage Corp (OTCBB:FMCC) reported the Primary Mortgage Market Survey® data, indicating average fixed mortgage rates tumbled following a poor September jobs report. As a result, the average rates continues to remain below 4% for the eleventh successive week, including the fifteen-year fixed declining below 3% for the first time since April 2015.
The data
30 year FRM averaged 3.76% with an average 0.6 point for the seven-day period ending October 8, compared to 3.85% in previous week. A year ago in same period, it averaged 4.19%. 15-year FRM averaged 2.99% with an average 0.6 point compared to 3.07% in preceding week. A year ago during same period, it averaged 3.36%.5-year Treasury-indexed and one-year Treasury-indexed ARM averaged 2.88% and 2.55%, respectively this week compared to 2.91% and 2.53% correspondingly in preceding week.
Disappointing jobs data
Sean Becketti, the Chief Economist said that calling the jobs report of last month ‘disappointing’ is an understatement as the economy added just 142,000 jobs. Federal Home Chief Economist further added things look worse as there were downward revisions in the job report of prior two months. The labor force participation figure declined to 62.4%, the lowest figure since 1977. Also, the hourly wages were flat. Treasury yields plunged below 2% resulting in a 9 basis point drop in the thirty-year mortgage rate to 3.76%.
The view
Like many investors, Mr. Gary Hindes, who leads Delaware Bay, is positive on Federal Home Loan Mortgage Corp (OTCBB:FMCC) and Fannie Mae. He is less pleased about U.S. Treasury’s decision to claim almost all the profits recorded by the two mortgage companies. In August 2015 he filed a lawsuit in federal court in Delaware, alleging the Treasury profit sweep breaches Virginia and Delaware state laws that defend shareholder rights.
In last trading session, the stock price of Federal Home gained 0.83% to close the trading session at $2.42. The gains came at a share volume of 5.50 million compared to average share volume of 1.92 million.
