Mortgage rates reversed course yet again during the week ended March 4 with the 30-year fixed-rate mortgage (FRM) once more falling below 5 percent. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year FRM averaged 4.97 percent with an average of 0.7 point compared to an average rate of 5.05 percent with 0.7 point the previous week.

The 15-year FRM averaged 4.33 percent, down from 4.40 percent the week before.  Fees and points remain unchanged at 0.7 point.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) had an average rate of 4.11 percent, down from 4.16 percent during the week ended February 25.  Fees and points also declined from 0.6 point to 0.5 point.

The one-year Treasury-indexed ARM was the lone exception to the downward trend.  The average rate for that product was 4.17 percent with 0.6 point.  A week earlier the rate was 4.15 percent also with 0.6 point.

"30-year fixed mortgages fell below 5 percent to match levels seen two weeks ago and are helping to maintain affordable home-purchase conditions," said Frank Nothaft, Freddie Mac vice president and chief economist. "In fact, monthly principal and interest mortgage payments for a typical family buying a median-priced home of $163,800 were just $709 in January, the lowest amount since February 1998, according to the National Association of Realtors®.  For first-time homebuyers, the fourth quarter of 2009 was the third most affordable quarter since 1981 behind the first and second quarter of 2009.

"The federal tax credit for homebuyers, which expires on April 30th, may make housing even more affordable for some families already in the middle of the home buying process. In fact, the Federal Reserve's March 3rd regional economic review noted that several districts attributed stronger home sales to the homebuyer tax credit."

Fannie Mae reported that its weekly yields had experienced a similar decline. The conventional 30-year FRM had an average yield of 4.70 percent during the week ended February 26 compared to 4.82 percent a week earlier.  The 15-year FRM dropped to 3.98 percent from 4.11 percent and FHA/VA guaranteed loans averaged 5.40 percent compared to 5.49 percent the previous week.  The one-year ARM slipped slightly to 2.44 percent from 2.46 percent.

All Fannie Mae yields are quoted on a net basis.  Servicing fees are not included.