McLean, VA – Freddie Mac (NYSE: FRE) announced today that its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series registered a 5.3 percent annualized decline in U.S. house prices during the first quarter of 2009, following a downward revised 18.5 percent annualized drop in the fourth quarter. Over the year ending with the first quarter of 2009, U.S. home sales prices fell 8.4 percent in the CMHPI Purchase-Only Series – less than the 9.7 percent annual decline recorded between the fourth quarter of 2007 and the fourth quarter of 2008.

“The improvement in house-price change from a steep decline to a more moderate one is consistent with other housing market data that point to the highest level of home-purchase affordability in at least 40 years and a stabilization in existing home sales and single-family construction in the first quarter, albeit at low levels of activity,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This pattern was consistent across all nine regions of the U.S., with the rate of depreciation lessening in seven regions, and switching to modest appreciation in New England and the East North Central states.

“Local markets that currently experience high levels of vacant-for-sale homes will continue to experience declines in prices over the coming year. This will likely cause some further decline in the CMHPI Purchase-Only series for the U.S. over several more quarters. Nonetheless, it is important to realize that some local markets will experience stable or modestly rising prices even though the national metric may decline.”

The CMHPI Purchase-Only Series excludes all refinancings in its calculation. Freddie Mac also produces a CMHPI Classic Series that includes data from both home purchase transactions and mortgage refinancings, with the latter values based on appraisals. Generally, because appraisals are backwards looking through the use of recent comparable property transactions, the Classic Series will typically lag changes in the Purchase-Only series. The CMHPI Classic Series indicated that over the year ending with the first quarter, home values depreciated 4.0 percent in the U.S. measure, less than the 5.3 percent decline over the year ending in the fourth quarter of 2008.

The CMHPI Purchase-Only Series had the following regional house-price changes:

New England Division (CT, MA, ME, NH, RI, VT): rose 0.8 percent (3.4 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 3.3 percent, and during the last five years, home values increased 6.3 percent.

East North Central Division (IL, IN, MI, OH, WI): rose 0.5 percent (1.9 percent, annualized) in the first quarter of 2009. Over the last 12 months, home values decreased 3.9 percent, and during the last five years, home values decreased 0.4 percent.

South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): fell 0.3 percent (–1.3 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 9.6 percent, and during the last five years, home values increased 13.1 percent.

West South Central Division (AR, LA, OK, TX): dipped 0.7 percent (–2.7 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 0.5 percent, and during the last five years, home values increased 21.4 percent.

East South Central Division (AL, KY, MS, TN): fell 0.8 percent (–3.1 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 2.8 percent, and during the last five years, home values increased 17.6 percent.

West North Central Division (IA, KS, MN, MO, ND, NE, SD): decreased 0.9 percent (–3.4 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 2.8 percent; over the last five years, home values increased 6.7 percent.

Middle Atlantic Division (NJ, NY, PA): decreased 1.5 percent (–5.8 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 4.6 percent, and during the last five years, home values increased 22.1 percent.

Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): declined 4.0 percent (–15.0 percent, annualized) in the first quarter of 2008. In the last 12 months, home values decreased 12.0 percent; during the last five years, home values increased 16.0 percent.

Pacific Division (AK, CA, HI, OR, WA): decreased 4.7 percent (–17.4 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 21.2 percent, and during the last five years, home values have decreased 4.9 percent.

Unlike other home price indexes based on mean or median values of homes sold during a given period, the Conventional Mortgage Home Price Index is constructed, using regression techniques, from observations of actual sales prices or appraised values of the same homes over time. The street addresses of properties that serve as collateral for mortgages funded by the two secondary mortgage market firms are processed using software certified by the United States Postal Service to create a uniform address format and are then matched to identify consecutive transactions on the same property. There are currently more than 40.3 million records in the repeat-transactions database used to construct the classic Conventional Mortgage Home Price Index – this database includes transactions on one-unit detached and single-family townhome properties serving as collateral on loans originated through the first quarter of 2009 and purchased by Freddie Mac and Fannie Mae by March 31, 2009.

Freddie Mac publishes the Conventional Mortgage Home Price Index each quarter. Index values and growth rates for the nation as a whole as well as for the nine Census divisions, the 50 states and the District of Columbia, and 392 metropolitan statistical areas (MSAs) and metropolitan divisions under the classic series of the CMHPI are available and the purchase-transaction only series is available for the nation and nine Census divisions. All of the CMHPI series can be found on Freddie Mac’s web site, www.freddiemac.com/finance/cmhpi/.

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, Conventional Mortgage Home Price Index (CMHPI), www.freddiemac.com

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 4.91 percent with an average 0.7 point for the week ending May 28, 2009, up from last week when it averaged 4.82 percent. Last year at this time, the 30-year FRM averaged 6.08 percent.

The 15-year FRM this week averaged 4.53 percent with an average 0.7 point, up from last week when it averaged 4.50 percent. A year ago at this time, the 15-year FRM averaged 5.66 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.82 percent this week, with an average 0.6 point, up from last week when it averaged 4.79 percent. A year ago, the 5-year ARM averaged 5.62 percent.

One-year Treasury-indexed ARMs averaged 4.69 percent this week with an average 0.6 point, down from last week when it averaged 4.82 percent. At this time last year, the 1-year ARM averaged 5.22 percent. The 1-year ARM has not been lower since the week ending September 29, 2005, when it averaged 4.68 percent.

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

"Fixed-rate mortgage rates followed long-term bond yields higher this week as financial markets try to discern the state of the economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Consumer confidence rose again in May and represented the largest two-month rally since records began in 1967. According to the National Association for Business Economics, the consensus of a recent survey of 45 professional forecasters called for the recession to end in the second half of this year, but the recovery is to be more moderate than the previous survey.

"Housing continues to be a drag on the economy, however. Although single-family existing home sales rose 2.5 percent in April, inventories of homes for sale also rose to 9.6 months from 9.0 in March, according to the National Association of Realtors® (NAR). Moreover, the NAR noted that sales of distressed homes made up 45 percent of the purchases in April. Such types of sales mixed with a large supply of unsold homes keep depressing house prices. For example, a new research report from the Federal Housing Finance Agency found that sales of distressed homes accelerated the measured decline in California's home values by 5.3% from the peak in 2006 through the first quarter of 2009."

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® (PMMS®), www.freddiemac.com

The market for residential real estate rose modestly as buyers try to take advantage of the prices which were 15.4 percent below last year’s level.

The National Association of Realtors reported that existing home sales rose slightly by 2.9 percent to a seasonally adjusted annual rate of 4.68 million units compared to the revised rate of 4.55 million in March.

First-time homebuyers contributed to the increase in sales, according to Lawrence Yun, NAR's chief economist, but there a seasonal rise of repeat buyers was also reported. "Most of the sales are taking place in lower price ranges and activity is beginning to pickup in the mid-price ranges, but high-end home sales remain sluggish," he said.

The median price of homes sold in April was just $170,200, a 15.4% year-over-year drop. The median home price is the threshold which divides the real estate market into two equal halves, in reference to pricing. One half of all homes in the market were sold at a price above the median home price, while the other half were sold below that price.

Traditionally, the 30-year fixed-rate mortgage has been the most accepted mortgage instrument for borrowers who seek steady and lower payments. On the other hand, adjustable-rate mortgages are availed of by the risk takers.

But recently, there has been increasing activity in the 15-year fixed-rate mortgage. One of the reasons for this is the relatively lower interest rates on the 15-year fixed rate loans. Rates on all loans have dropped this year, but rates on 15-year loans dropped more sharply in February and April compared to the 30-year fixed rate mortgages.

Also, recently observed, rates on 15-year loans have been about a quarter of a percentage point lower than those of 30-year loans.

Rates on 15-year loans are as low they have been since June 2003 when they reached 4.41 percent and at an average low of about 4.5 percent since January, according to the Mortgage Bankers Association.

Also, when it comes to savings, for example, borrowing $400,000 with a 4.375 percent interest on a 15-year loan, the average rate earlier this month, the borrower is expected to make a monthly payment of about $3,034 a month, compared with about $2,056 a month for a 30-year fixed-rate loan at a 4.625 percent average interest rate.

With 180 fewer payments than the 30-year loan, the borrower with that 15-year loan would pay $194,000 less in interest over the life of the mortgage.

The number of 15-year mortgages issued in February increased to 74,497 from 42,178 in January, according to First American CoreLogic, a real estate consulting company.

Also, first time home buyers with lower credit scores and less money for down payments have availed of the 15-year mortgages.

Home prices fell at the fastest annual rate during the first quarter of 2009, according to a report released Tuesday. But the pace of monthly decline decelerated.

The Standard & Poor’s/Case-Shiller National Home Price index dropped a record 19.1 percent during the first three months compared with the first quarter of 2008 considered the highest in the 21-year history of the index.

Home prices have dropped 32.2 percent since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002.

The Case-Shiller 20-city index fell 18.7 percent in March year-over-year, also a record. It fell 18.5% during the last quarter of 2008. This index has plunged 32.2 percent from its July 2006 peak and has fallen for the 32nd straight month.

The Case-Shiller 10-city index dropped 18.6 percent. Those declines were at a slower pace. "Declines in residential real estate continued at a steady pace into March," according to David Blitzer, chairman of the Index Committee at Standard & Poor's in a prepared statement. "All 20 metro areas are still showing negative annual rates of change in average home prices with nine of the metro areas having record annual declines."

There are no clear signs yet that home prices have reached the bottom.

Minneapolis recorded the largest monthly price loss of any metro area in the 20-city index in March, losing 6.1 percent compared with February. That is the biggest single-month dive for a city in index history.

Sun-Belt cities still had the largest year-over-year declines in March, with Phoenix, Vegas and San Francisco topping the list with prices down 36 percent, 31.2 percent and 30.1 percent respectively.

Also in the report, two cities have shown that prices have dropped more than 50 percent from their peak prices. They are Phoenix which is 53 percent off since June 2006 and Las Vegas down by 50.4 percent from its August 2006 high.