Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates starting the year at or near their all-time lows. The 30-year fixed averaged 3.91 percent matching its all-time record low amid recent data showing signs of improvement in the housing market and manufacturing industry. This marks the fifth consecutive week the 30-year fixed has averaged below 4.00 percent.

News Facts

30-year fixed-rate mortgage (FRM) averaged 3.91 percent with an average 0.8 point for the week ending January 5, 2012, down from last week when it averaged 3.95 percent. Last year at this time, the 30-year FRM averaged 4.77 percent.

15-year FRM this week averaged 3.23 percent with an average 0.8 point, down from last week when it averaged 3.24 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.86 percent this week, with an average 0.7 point, down from last week when it averaged 2.88 percent. A year ago, the 5-year ARM averaged 3.75 percent.

1-year Treasury-indexed ARM averaged 2.80 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.24 percent.  

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement. Pending existing home sales in November jumped 7.3 percent, nearly five times greater than the market consensus forecast, to its strongest pace since April 2010. In addition, construction spending rose 1.2 percent in November, supported by the residential sector which exhibited its fourth consecutive monthly increase. Similarly, manufacturing expanded in December at the fastest pace in six months."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE: Freddie Mac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.co

The Federal Housing Administration is seen to be bailed out by taxpayers as its latest monthly outlook report revealed an increase in serious delinquencies for loans insured by the agency.

This seems to pose more threat to the agency's already depleted cash reserves. The report showed that the percentage of loans in the FHA portfolio with thee missed payments or more increased to 9.3 percent in November from 8.4 percent in August.

An independent audit of the FHA's finances in November concluded that losses from mortgage defaults had consumed the agency's reserve fund to 0.24 percent, or $2.6 billion, during fiscal 2011. Congressionally-mandated agency reserve fund is 2 percent level. In 2006, before the housingdownturn, the reserve fund stood at 7%. The ratio measures the net worth of the reserve fund compared with the value of the loans FHA has insured.

In that audit, the agency's auditor warned that further home price drops could cause the FHA to eat up the remainder of its reserves, forcing it to either seek a bailout from the Treasury Department or further increase the premiums it charges borrowers. The FHA doesn't issue mortgages, but instead insures lenders against defaults.

Experts says such a bailout could cost billions.

Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates finishing the year near their all-time historic lows helping to keep homebuyer affordability high. Averaging 3.95 percent, the 30-year fixed has been at or below 4.00 percent for the past nine consecutive weeks and only twice in 2011 did it average above 5.00 percent.

News Facts

30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending December 29, 2011, up from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.86 percent.

15-year FRM this week averaged 3.24 percent with an average 0.8 point, up from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.88 percent this week, with an average 0.6 point, up from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 3.77 percent.

1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.77 percent. At this time last year, the 1-year ARM averaged 3.26 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Mortgage rates ended the year hovering near historic lows in an already affordable housing market. For instance, the seasonally-adjusted S&P/Case-Shiller® 20-City Composite home price index in October was the lowest seen since March 2003. The largest hit areas were Las Vegas with the lowest reading since January 1997 and Atlanta which was since June 1998. It's not surprising then that over 5 percent of households in December plan to purchase a home over the next six months, the highest share since May, according to The Conference Board."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE: Freddie Mac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com

Home prices in the US fell in October marking the sixth straight month of decline. Prices were 1.2 percent down compared with September and 3.4 percent below year ago level, according to the latest S&P/Case-Shiller 20-city index.

The home price decline was a setback as several recent reports showed positive developments in the market partivularly new home sales, existing home sales and home building. Mortgage rates are at record lows, which should be enticing buyers.

The 20-city index has fallen every month since April. Since the housing bust began in mid-2006, homes have lost nearly 33 percent of their value.

Nineteen of the 20 cities covered by the index experience price declines in October. Phoenix was the only metro that posted price increase after three months of price declines.

The Case-Shiller index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average.

Atlanta, Detroit and Minneapolis posted the biggest monthly declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began. Prices rose in Phoenix after three straight monthly declines.

New home sales rose to a seven-month high in November to an annualized rate of 315,000 in a report released by Commerce Department Friday. This was 1.6 percent above October's revised rate of 310,000 and 9.8 percent higher than November 2010's rate.

The sales rate was less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market.

The median sales price for a new home fell 3.8 percent to $214,100 last month. Compared to November last year, the median price was down 2.5 percent.

There were 158,000 homes on the market which at current sales pace would take 6 months to sell and considered the lowest in 5-1/2 years.

The median price for a new home was $214,100 in November falling 3.8 percent from last year's price.