McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.97 percent with an average 0.7 point for the week ending November 26, 2008, down from last week when it averaged 6.04 percent.  Last year at this time, the 30-year FRM averaged 6.10 percent.  The 30-year FRM has not been this low since October 9, 2008, when it was 5.94 percent.

The 15-year FRM this week averaged 5.74 percent with an average 0.7 point, up slightly from last week when it averaged 5.73 percent.  A year ago at this time, the 15-year FRM averaged 5.73 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.86 percent this week, with an average 0.6 point, down slightly from last week when it averaged 5.87 percent.  A year ago, the 5-year ARM averaged 5.86 percent.

One-year Treasury-indexed ARMs averaged 5.18 percent this week with an average 0.5 point, down from last week when it averaged 5.29 percent.  At this time last year, the 1-year ARM averaged 5.43 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Interest rates for 30-year fixed-rate mortgages fell for the fourth consecutive week as signs the overall economy is flagging lowered most interest rates market-wide," said Frank Nothaft, Freddie Mac vice president and chief economist.  "And economic growth in the third quarter was revised downward this week, led by the first decline in consumer spending since the fourth quarter of 1991 and the largest drop since the second quarter of 1980."

However, declining house prices and low mortgage rates have raised housing affordability in September to the highest level since February of this year, according to the National Association of Realtors® (NAR).

"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: FreddieMac, Primary Mortgage Market Survey, www.freddiemac.com

Sales of new homes fell in October to the lowest point in nearly 18 years while the median price of a new home dropped to the lowest level since 2004. New homes sales fell in October to a record annual rate not seen since 1991.

The Commerce Department reported Wednesday that sales of newly constructed homes decreased 5.3 percent last month to an annual sales pace of 433,000 homes down from September’s annual rate of 457,000. The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago. It was the lowest median sales price since September 2004.

The number of new homes on the market fell in October to an estimated 381,000 from 414,000 in September. The decline in sales pushed the inventory of unsold homes up to 11.1 months, meaning it would take that long to exhaust the stock of unsold homes at the October sales pace.

The median sales price of new houses sold in October was $218,000, down from $218,400 the month before. It was the lowest level since June 2004, when the median home price was $215,700.

Nationwide, the housing slump already has cost 3 million jobs in construction and related industries, and the home builders are asking Congress to help with increased support for the industry.

The home prices nose-dived by a record annual rate in the third quarter of 2008. This was the sharpest at 16.6% decline compared to the same period last year. This overshadowed the previous established record of 15.1% set during the second quarter of this year. This was according to the S&P Case-Shiller Report Home Price Index.

Prices are at first quarter of 2004. Prices in the Case-Shiller's 10-city index dropped a record 18.6%, while its wider 20-city index fell a record 17.4%

Price drops were caused by pressures of increasing foreclosures rates, job cuts and weak economy.

 "The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals," said David Blitzer, Standard & Poor's spokesman for the indexes, in a press release. "All three aggregate indices, and 13 of the 20 metro areas, are reporting new record rates of decline...Prices are back to where they were in early 2004."

The 10-city index have fallen from June 2006 peak price by 23.4%; while the 20-city index dropped 21.8% from its July 2006 record high while the national index has fallen 21% since the third quarter of 2006.

It was the 26^th consecutive month that the 10-city index has dropped. The fall has extended over the past 12 months, while prices in every city of the 20-city index declined during September.

Prices in Phoenix dropped 31.9%. Las Vegas prices fell 31.3% and San Francisco at 29.5% decline. The best performing markets, Dallas and Charlotte, N.C., still posted declines - 2.7% in Dallas and 3.5% in Charlotte.

Included also in the 10-city index are: Miami, down 28.4% year-over-year; Los Angeles, down 27.6%; San Diego, down 26.3%; Washington, down 17%; Chicago, down 10.1%; New York, down 7.3%; Boston, down 5.7%; and Denver, down 5.4%.

Aside from the members or the 10-city index the 20-city index also includes: Detroit, down 18.6%); Tampa, Fla., down 18.5%; Minneapolis, down 14%; Seattle, down 9.8%; Atlanta, down 9.5%; Portland, Ore., down 8.6%; and Cleveland, down 6.4%.

Karl Case, an economics professor at Wellesley College and co-creator of the Case-Shiller index, said during a news conference he expects delinquencies and foreclosures to rise as unemployment increases, further pressuring the housing market.

He added that the national index price trends tend to be more moderate because they encompass many more exurban and rural areas, where, in many cases, home prices never skyrocketed as they did in some of the hotter, urban markets.

Sales of existing homes dropped in October while prices continued to fall as prospective buyers put on hold as they remain cautious due to the weak economy.The National Association of Realtors reported Monday that sales of existing homes slid 3.1 percent to 4.98 million in October from a September reading of 5.14 million.

The drop was bigger than expected which was 5.05 million.

On a year-over-year basis, sales dropped 1.6% during the said month."Many potential homebuyers appear to have withdrawn from the market due to the stock-market collapse and deteriorating economic conditions," said Lawrence Yun, NAR chief economist, in a statement. The national median sales price for existing-home in October was $183,300, down 11.3% from a year ago when the median was $206,700.

In September, the median existing-home price was $191,400. This was the largest year-over-year drop on records since 1968, and the lowest median sales price since March 2004 when it stood at $183,200.The large number of foreclosures and distress sales, which distorts the comparison to last year's October median price caused home prices to further fall, said NAR spokesman Walter Molony.

"About 45% of all sales in October were distressed sales," Molony said. Still, falling home prices suggest that the market is in the correction stage moving toward "price equilibrium," Molony said.

The current national housing inventory at the end of October eased 0.9% to 4.23 million existing homes, according to the report. At the current sales pace, that represents a 10.2 months of supply, which is would be longer than it was in September with only 10-month supply.

Sales declined nationwide on a monthly basis contrary to what is happening in the West where there was a rise of 37.5% over year-ago levels, implying that some buyers are would want to benefit from the distressed sales in overbuilt areas in California and Nevada.  

Foreclosure and eviction proceedings are suspended from November 26, 2008 to January 9, 2009 to give the recently announced mortgage rescue plan time to work.  Mortgage giants Fannie Mae and Freddie Mac have directed their network of servicers not to implement foreclosure and eviction during the said period.

FreddieMac has instructed its servicers to inform the 6000 borrowers who have an auction sale or an eviction planned within the dates specified above. Fannie Mae is anticipating about 10,000 of its borrowers will be covered by the break. Borrowers scheduled for eviction between November 20 and 26 are not covered by the foreclosure and eviction suspension. In total, about 16,000 homeowners are covered by the moratorium.

"By delaying these foreclosure sales, the nation's servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new [plan]," said Freddie Mac CEO David M. Moffett in a release.

The plan was announced to public on Nov. 11. To be eligible, homeowners must be 90 days or more late in their mortgage payments, owe at least 90% of their home's current value, live in the home on which the mortgage was taken and have not filed for bankruptcy.

The mortgage rate could be lowered to as little as 3% for five years. After that, it would increase by 1 percentage point a year until it hits either the market rate or the original interest rate, whichever is lower.

Also, the announcement "provides a new measure of certainty to many of these families during the holidays,"  Moffett said in a statement.