15-Year FRM Drops to Set Another New Low in Freddie Mac Survey History

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 4.78 percent with an average 0.7 point for the week ending November 25, 2009, down from last week when it averaged 4.83 percent. Last year at this time, the 30-year FRM averaged 5.97 percent. The 30-year has not been this low since the week ending April 30, 2009, when it averaged 4.78 percent.

The 15-year FRM this week averaged 4.29 percent with an average 0.6 point, down from last week when it averaged 4.32 percent. A year ago at this time, the 15-year FRM averaged 5.74 percent. The 15-year FRM has never been this low since Freddie Mac started tracking it in 1991.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.18 percent this week, with an average 0.6 point, down from last week when it averaged 4.25 percent. A year ago, the 5-year ARM averaged 5.86 percent. The 5-year ARM has never been this low since Freddie Mac started tracking it in 2005.

The 1-year Treasury-indexed ARM averaged 4.35 percent this week with an average 0.7 point, unchanged from last week when it averaged 4.35 percent. At this time last year, the 1-year ARM averaged 5.18 percent. The 1-year ARM has not been this low since the week ending July 7, 2005, when it averaged 4.33 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 eased for the fourth consecutive week to record levels," said Frank Nothaft, Freddie Mac vice president and chief economist." Interest rates for 30-year fixed mortgage loans tied an all-time record low while both 15-year fixed mortgages and 5-year ARMs broke their corresponding records. Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage.

"House prices are slowly beginning to firm now. For instance, annual house price declines slowed for the sixth consecutive month in September, down only 3 percent, and represented the smallest decline since February 2008, according the Federal Housing Finance Agency's purchase-only house price index. [PDF] Moreover, 11 of the 20 major metropolitan areas experienced monthly house price increases between August and September, based on the S&P/Case-Shiller® 20-city house price indexes ."

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

New homes sales rose last month to the highest level in more than a year. The Commerce Department said Wednesday that sales last month rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September.

It was the sixth time that the sales of new homes had risen in the past seven months.

The median sales price of new houses sold in October was $212,200, up from $204,800 in September.

The average sales price was $261,100.

There were 239,000 new homes for sale at the end of October, the lowest inventory level in nearly four decades.

Regionally, in the South sales increased 23 percent. Sales dropped about 5 percent in the West and Northeast, and in the Midwest by 20 percent.

Home prices jumped for the second straight quarter but remained nearly 9 percent below last year’s level, a housing industry report released Tuesday.

Home prices increased 3.1 percent nationwide in the third quarter of 2009, according to the S&P/Case-Shiller Home Price Index, a gauge of housing market direction. That followed 3.1 percent increase in the previous quarter.

Prices were still down compared to third quarter last year’s level by 8.9 percent but a big improvement compared to the double-digit year over year price decreases in this year’s second and first quarter with 14.7 and 19 percent respectively.

"We have seen broad improvement in home prices for most of the past six months," says David Blitzer, Chairman of the Index Committee at Standard & Poor's.

The Case-Shiller 20-City Composite index posted its fifth monthly increase in a row in September, rising 0.3% from August levels.

Las Vegas remained to be the worst performing market where prices have fallen for 37 consecutive months. They're now 55.4 percent below their peak.

Prices in midwestern cities such as Minneapolis and Detroit rose 1.8 percent, the most of any of the 20-cities covered. Chicago prices climbed 1.2 percent; San Francisco rose 1.3 percent while both Los Angeles and Phoenix each gained 0.8 percent.

Existing home sales surged for the second month in a row in October, rising to the highest level in 2 1/2 years according to a real estate industry report issued Monday. The increase was attributed to the first-time buyers rushed to take advantage of a tax credit which was set to expire November 30 but was extended.

The National Association of realtors said home resales nationwide rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October from a downwardly revised pace of 5.54 million in September. Home sales are now up nearly 36 percent from their bottom in January but still down 16 percent from its peak in autumn 2005.

The median price of homes sold in October was $173,000, a 7.1 percent year over year drop.

At the current sales pace, the total housing inventory fell 3.7 percent to 3.57 million existing homes for sale. That’s a 7-month supply of homes, down from an 8-month supply in September.

Single-family home sales increase 9.7 percent to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4 percent compared to last year.

Condominium and co-op sales surged 13.2 percent to a seasonally adjusted annual rate of 770,000 units, from 680,000 in September, and are 40.8 percent above October 2008's rate.

Total existing home sales rose 14.4 percent in the Midwest in October to a pace of 1.43 million and 28.8 percent above a year ago.

In the Northeast, sales surged 11.6 percent to an annual level of 1.06 million; sales in the South climbed 12.7 percent to 2.30 million; and in the West, sales went up 1.6 percent to 1.31 million.

15-Year FRM Drops to Lowest Ever Recorded in Freddie Mac Survey History

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 4.83 percent with an average 0.7 point for the week ending November 19, 2009, down from last week when it averaged 4.91 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.

The 15-year FRM this week averaged 4.32 percent with an average 0.6 point, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 5.73 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent this week, with an average 0.6 point, down from last week when it averaged 4.29 percent. A year ago, the 5-year ARM averaged 5.87 percent.

The one-year Treasury-indexed ARM averaged 4.35 percent this week with an average 0.6 point, down from last week when it averaged 4.46 percent. At this time last year, the 1-year ARM averaged 5.29 percent.

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

“Interest rate on 30-year fixed-rate mortgage loans fell for the third consecutive week to the lowest since the week ending May 21st, while 15-year fixed rates were the lowest since our records began in 1991,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan. Moreover, for the fourth consecutive quarter, more than 95 percent of prime borrowers who originally had an ARM selected a conventional fixed-rate mortgage in the third quarter of this year.

“Meanwhile, new home building showed some weakness in recent months. Residential construction eased 10.6 percent (annualized) between September and October, largely driven by a 33.3 percent decline in new condominium and apartment buildings and represented the slowest pace since records began in 1959. And homebuilder confidence in November remained a relatively low level, according to the National Association of Home Builders .”

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