Slightly Higher Rate Still Remains Very Affordable by Historical Standards

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 December 31, 2009, up from last week when it averaged 5.05 percent. Last year at this time, the 30-year FRM averaged 5.10 percent.

The 15-year FRM this week averaged 4.54 percent with an average 0.7 point, up from last week when it averaged 4.45 percent. A year ago at this time, the 15-year FRM averaged 4.83 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, up from last week when it averaged 4.40 percent. A year ago, the 5-year ARM averaged 5.57 percent.

The 1-year Treasury-indexed ARM averaged 4.33 percent this week with an average 0.6 point, down from last week when it averaged 4.38 percent. At this time last year, the 1-year ARM averaged 4.85 percent.

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

“Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50 percent less in interest payments over the full 30-year term.

“Nationally, the housing market is slowly improving. House prices rose for the fifth consecutive month in October to the highest level since the beginning of 2009, according to the S&P/Case-Shiller® 20-city composite index . Eleven of the cities experienced positive growth.”

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 new homes dropped unexpectedly in November to the lowest level since April, signaling a rough and rugged road to housing market recovery.

The 11 percent drop from October's pace shows that consumers are taking their time before making a decision as the deadline for first-time buyers to qualify for a tax credit has been extended.

The tax credit was first set to expire at the end of November, but Congress pushed the date to April 30. The program was also expanded to include current homeowners who will relocate.

New home sales data, released Wednesday, an indicator of future real estate activity is a better gauge than home resale. The new home figures tally sales agreements signed in November, while sales of previously occupied homes reflect contracts signed over the summer that were completed in November.

The November rate was the lowest since April, when new homes sold at an annualized rate of 345,000.

While the market for new home sales has improved in the wake of the housing crisis, it is a far cry from its July 2005 peak, when sales of new construction hit an annualized rate of nearly 1.4 million.

The largest November declines occurred in the Midwest and the South, where sales rates plunged more than 21% over the last 12 months.

The Census Bureau said there were 235,000 new homes for sale at the end of November. That represents enough supply to last for 7.9 months at the current sales rate.

The inventory has declined substantially since January, when there was enough supply of new homes to last more than a year, according to the government.

Sales of existing homes surged last month to level not seen in three years, signaling a comeback from the market’s downturn since the Great Depression.

Buyers rushed to complete sales before the original expiration date of the federal tax credit for first time home buyer, which was earlier scheduled to expire November 30. The tax credit was extended and expanded to help the housing market recovery.

The National Association of Realtors estimated that about 2 million homebuyers have taken advantage of the credit projects another 2.4 million will avail of the tax credit which is set to expire middle of next year. More than half of all transactions last month were done by first time homebuyers which pushed sales up 44 percent above last year's levels.

Sales are now up 46 percent from the bottom in January, but still 10 percent below its peak more than four years ago.

The median sales price was $172,600, down 4.3 percent from a year earlier, and up 0.2 percent from October.

30-Year and 15-Year Rates Still at Incredibly Low Levels

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 5.05 percent with an average 0.7 point for the week ending December 24, 2009, up from last week when it averaged 4.94 percent. Last year at this time, the 30-year FRM averaged 5.14 percent.

The 15-year FRM this week averaged 4.45 percent with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago at this time, the 15-year FRM averaged 4.91 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago, the 5-year ARM averaged 5.49 percent.

The 1-year Treasury-indexed ARM averaged 4.38 percent this week with an average 0.6 point, up from last week when it averaged 4.34 percent. At this time last year, the 1-year ARM averaged 4.95 percent.

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

"Although interest rates for 30-year fixed-rate mortgages are above 5 percent this week for the first time since the end of October, they are still around 0.5 percentage points below this year’s peak set in mid-June,” said Frank Nothaft, Freddie Mac vice president and chief economist. "ARM rates increased by a lesser amount as the market consensus calls for no rate hikes by the Federal Reserve in the immediate future.

"Meanwhile, the housing market continues to show improvement. Total existing home sales jumped 7.4 percent in November to an annualized pace of 6.54 million units, which was the most since February 2007. Moreover, the number of unsold existing homes was the lowest since December 2006 and the number of unsold new homes was the least since April 1971, which may leave future room for new construction.”

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

Under the program, which begins Friday, Citi will halt all foreclosure sales on first mortgage accounts and stop evicting homeowners nationwide through Jan. 17. The bank also will cease evictions.

The company foresees that 2,000 homeowners with scheduled foreclosure sales and another 2,000 that were due to receive foreclosure notices will benefit from the suspension.

Citigroup's program affects only those loans owned by the bank, about 20% of the company's $746 billion mortgage servicing and lending portfolio, Citigroup said.