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 5.14 percent with an average 0.7 point for the week ending August 27, 2009, up from last week when it averaged 5.12 percent. Last year at this time, the 30-year FRM averaged 6.40 percent.

The 15-year FRM this week averaged 4.58 percent with an average 0.7 point, up from last week when it averaged 4.56 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.67 percent this week, with an average 0.6 point, down from last week when it averaged 4.57 percent. A year ago, the 5-year ARM averaged 6.03 percent.

One-year Treasury-indexed ARMs averaged 4.69 percent this week with an average 0.6 point, unchanged from last week when it averaged 4.69 percent. At this time last year, the 1-year ARM averaged 5.33 percent.

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

"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist." Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.

"Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported. The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993. In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency's purchase-only house price index."

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

Sales of newly constructed homes jumped in July to hit their highest level since last September.

During that month, new homes sales reached an annual rate of 433,000 according to a joint report issued by the Census Bureau and Department of Housing and Urban Development.

The news followed other positive housing market reports earlier this month, including a spike in existing home sales, home prices and affordability.

With the increase in sales, inventory of new homes for sales dropped to 271,000 from 281,000.

The current inventory is considered the lowest in 16 years and at the current sales pace, that would be a 7.5 month supply from 8.8 months in June.

A rise in the S&P/Case-Shiller Home Price Index suggests that the price drops and the market is on the road to recovery.

US home prices increased 2.9 percent in the quarter ended June 30 after three years of declines, according to the latest S&P/Case-Shiller report, recording the first quarter-over-quarter price improvement in three years.

Home prices are down 14.9 percent compared with the same period last year but that is better than the record drop of 19.1 percent set in the first quarter of 2009.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor's said "We're seeing some positive signs."

The Case-Shiller 20-city index increased quarter-over-quarter by 1.4 percent but dropped 15.4 percent year-over-year. p

The price declines may be over as prices have reached affordability levels not seen in a generation which draws many buyers into the market and make other potential buyers feel the urgency as they might miss the market bottom.

Cities with the biggest rebound compared with the first quarter of 2009 are Cleveland, topping the list with 9.8 percent improvement, followed by. Dallas and San Francisco with 6.5 percent and 5.9 percent increase.

Price drops were experienced in seven cities which include Las Vegas down 7.8 percent, together with Miami and New York with 2.2 percent and 1.2 percent declines respectively.

Despite the positive report, Robert Shiller, one of the principle authors of the Case-Shiller index, expressed caution as the turnaround may quickly fizzle out as what happened last year and that the government has not yet handled the foreclosure and increase in bank repossessions may cause added inventory which could dampen prices.

Sales of Existing Homes which include ingle-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.

This was the fourth consecutive month of increase. The last time sales rose for four straight months was in June 2004 and the last time sales were higher than a year earlier was November 2005, the Realtors group said.

The monthly gain was the largest on record for existing-home sales since 1999. Lawrence Yun, NAR chief economist, is encouraged by this development and said “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales.”

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

Regionally, the strongest market was the Northeast, where sales surged 13.4 percent to an annual rate of 930,000 and was 3.3 percent above last July. The median price of homes sold in the Northeast during the month was $236,700 which was 15 lower than last year.

In the Midwest, existing-home sales jumped 10.9 percent to a level of 1.22 million and are 8.0 percent higher a year ago. The median home price in the Midwest have dropped 5.9 percent to $157,200.

In the South, sales were higher by 7.1 percent to an annual rate of 1.95 million and 5.4 percent above July 2008. The median home price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which was 28.0 percent lower than July 2008.

Total housing inventory at the end of July increased 7.3 percent to 4.09 million existing homes available for sale, which at current sales pace would be a 9.4-month supply. This was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

New homes construction dipped last month, but single family home building increased.

Housing starts declined in July to a seasonally adjusted annual rate of 581,000 units down 1 percent from 587,000 in June, the Commerce Department said Tuesday.

The recession has cut deeply into consumer demand and access to financing. Housing starts for July were 37.7% lower than the July 2008 rate of 933,000.

The fall was led by a 13 percent drop in apartment building.

Still, construction of single-family homes increased 1 percent to the highest level since October 2008. It was the fifth consecutive monthly increase.

Meanwhile, building permit applications, an indicator of future construction, fell 1.8 percent to a seasonally adjusted annual rate of 560,000 in July and down 39.4 percent compared to July 2008 rate of 924,000.

New home construction was strongest in the Midwest and was the only region in the country with an increase in the rate of new homes being constructed, posting a 12.9 percent increase from June.

The Northeast had the biggest drop, with housing starts down 16.3 percent while the South and West suffered 1.4% and 1.6% drop respectively.