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 4.98 percent with an average 0.6 point for the week ending January 28, 2010, down slightly from last week when it averaged 4.99 percent. Last year at this time, the 30-year FRM averaged 5.10 percent.

The 15-year FRM this week averaged 4.39 percent with an average 0.6 point, down slightly from last week when it averaged 4.40 percent. A year ago at this time, the 15-year FRM averaged 4.80 percent.

The 5-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 4.27 percent. A year ago, the 5-year ARM averaged 5.27 percent.

The 1-year Treasury-indexed ARM averaged 4.29 percent this week with an average 0.5 point, down from last week when it averaged 4.32 percent. At this time last year, the 1-year ARM averaged 4.90 percent.

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

“Mortgage rates held steady this week ahead of the Federal Reserve's (Fed) policy committee meetings ,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The Fed announced on January 27th that economic activity has continued to strengthen. It also noted that with substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time.

“Last year was rough on the housing market. The number of new one-family housing starts hit a historical low of just under half-a-million units since records began in 1959. Similarly, new home sales were under 400,000 homes, an all-time record since data compilation began in 1963. Total existing home sales, however, rose to almost 5 million houses, which was the first annual increase in four years.”

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

New home sales unexpectedly fell to a 9-month low in December ending the year with the industry’s weakest record according to a government issued report.

The Commerce Department said December sales plunged 7.6 percent to a seasonally adjusted annual rate of 342,000 compared to November’s upwardly revised rate of 370,000.

Home sales have had a rocky recovery and December’s sales indicated market demand remains sluggish despite newly expanded tax incentives to spur sales.

Only 374,000 homes were sold last year which is 23 percent from a year earlier and the weakest year since 1963 while last month’s sales were down nearly 9 percent compared to December 2008.

December's sales pace was up 4 percent from the bottom in January 2009, but still down 75 percent from the July 2005 peak.

Sales of new home plunged 41 percent in the Midwest, the largest December decline. In the South, sales fell by 7 percent but surged 43 percent in the Northeast and 5 percent in the West.

The median sales price of $221,300 in December was nearly 4 percent below compared 12-months ago figure of $229,600 but about 5 percent above November's median of $210,300.

The average sales price in December 2009 was $290,600 which was up compared to previous months’ 270,000.

There were 231,000 new homes for sale at the end of December and at the current sales pace it is enough to last 8.1 months. This is the 32nd month of decline and leaves supply at the lowest level since April 1971.

Data through November 2008, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, shows continued annual rates of decline of the 10-City and 20-City Indices continue to improve in spite of price declines across the markets during November.

U.S. home prices declines were recorded in November for the first time in seven months, according to an industry report released Tuesday.

The S&P/Case-Shiller 20-city home price index recorded a decline of 0.2% from October. Prices were 5.3 percent below November 2008 figure. All 20 metro area November readings showed annual rates of decline compared to October.

Of the 20 metro areas 11 showed record rates annual declines. The declines were unexpectedly large. Experts had forecast that prices would be off by only 5 percent compared with last November.

"While we continue to see broad improvement in home prices as measured by the annual rate, the latest data show a far more mixed picture when you look at other details." said David M. Blitzer, Chairman of Index Committee of the Standards and Poor’s. "Only five of the markets saw price increases in November versus October."

Four markets surveyed and included in the index namely Charlotte, Las Vegas, Seattle and Tampa hit their lowest index levels in four years, according to Blitzer. All the price gains in recent months have been erased.

Five markets registered month-over-month gains namely: Los Angeles, Phoenix, Portland, San Diego and San Francisco. They were led by Phoenix with 1.1 percent gain. Prices have risen in Los Angeles, Phoenix, San Diego and San Francisco for at least six consecutive months

Year over year, Dallas, Denver, San Diego and San Francisco have all entered positive territory, something not seen in at least two years in most markets.

Thirteen markets had declines; with Chicago down by 1.1 percent led the decliners. Miami and Dallas showed no change.

Blitzer cautioned, however, that November is a weak time of year for home sales so this might not be a harbinger. In fact, when the data is adjusted for seasonable variations, 14 of the markets recorded gains.

Experts think that home price have yet to reach rock bottom and may further drop by about 5 percent or so by the end of 2010.

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Sales of existing homes took their sharpest decline in more than 40 years last month after a federal tax credit was set to expire according to the National Association of Realtors. Yet, it managed to end 2009 with the first annual sales gain in four years.

NAR reported that sales of previously owned homes dropped 16.7 percent in December to a seasonally adjusted annual rate of 5.45 million units, down from the revised rate of 6.54 million in November. Still, it managed to end 2009 with its first annual gain in four years.

Year-over-year sales rose 15 percent.

Sales was expected to decline from November to December, because November was set to be the last month in which sales to first-time homebuyers could qualify for a federal tax credit of up to $8,000. Lawmakers have since extended that deadline through April 30. The program was also expanded to include existing home owners who moved by giving them a tax credit of up to $6,500.

In 2009, there were 5,156,000 existing-home sales. This was 4.9 percent higher than 2008's. Home prices fell by more than 12 percent last year. This was the biggest decline since the Great Depression. The price drop for 2009 where the median was $173,500 demonstrated that the housing market remains too weak and needs further push for a sustained economic recovery. Total sales for 2009 were 5.16 million which was 5 percent above 2008’s sales is.

The median sales price of home sold in December was $178,300, up 1.5 percent from a year earlier and the first yearly gain since August 2007 and a 1.5 percent gain over December 2008.

Distressed properties made up 32 percent of the homes sold during the month.

First-time home buyers were the main contributor to the housing market recovery. But their role is shrinking. They accounted for 43 percent of purchases in December, down from about half in November according to NAR.

Sales are now up 21 percent from the bottom a year ago. But they're down 25 percent from the peak more than four years ago.

Last year, total inventory of unsold homes on the market fell 6.6 percent to 3.29 million.

That's a 7.2 month supply at the current sales pace up from a 6.5 month supply in November.

Considered a healthy level is an inventory level of about six months.

Lawrence Yun, the Realtors' chief economist, cautioned that the recovery will depend on whether the economy starts adding jobs in the second half of the year.

Some Realtors are encouraged by the market indicators but some sees that unless the economy starts adding jobs, it would be hard to sustain the recovery.

Sales by property type:

Single family home sales down 16.8 percent to a seasonally adjusted annual rate of 4.79 million in December from a pace of 5.76 million in November, but up 12.7 percent compared to December 2008’s rate.

Condominium and co-op sales dropped 15.4 percent to a seasonally adjusted annual rate of 660,000 units in December, from 780,000 in November, but down 34.7 percent compared to 12 months ago level.

Sales by region:

Total existing home sales experienced sharpest decline in the Midwest, falling 25.8 percent in December to a pace of 1.15 million but still up 8.5% compared to December 2008’s sales.

The sales in the West fell 4.8 percent to an annual level of 1.38 million, sales in the South down 16.3 percent to 2.01 million; and the Northeast, down 19.5 percent to 910,000.

Troubled homeowners who are making lower mortgage payments on a trial basis are at risk of being kicked out of President Obama's foreclosure-prevention program as temporary review period have until January 31, 2010.

Mortgage servicers have until the end of the month to review all trial modifications that have been underway for several months under the Home Affordable Modification Program (HAMP). A new guideline will be issued next week.

During the review period, servicers must establish whether borrowers have made all their payments and have completed and passed all the necessary paperwork. Those who have not will receive letters giving them 30 days to comply.

The objective of the review is to clear up the backlog of borrowers stuck in trial modifications and have been waiting for about seven months to know if they qualify for a permanent modification on their mortgage.

This directive has some implications as seen by some bank regulators, as paperwork has proved to be a major stumbling block for the president's foreclosure-prevention program. Homeowners complain that their mortgage servicers lose the documents they send while financial institutions argue that borrowers have not been sending in their paperwork.

Aware of the problem, Treasury officials said that they will issue a new guideline to servicers next week which intends to hasten the conversion of borrowers in the trial mode to permanent modification. It may also lighten the documentation requirements.

Under fire for the low number of people receiving long-term help, the Treasury Department in late November increased the pressure on servicers to convert borrowers to permanent modifications.

Some 66,500 people have received permanent adjustments, with another 787,200 homeowners in trial modifications.

Overall, about three-quarters of the borrowers are making their payments on time, according to the Treasury Department.

Treasury officials already lightened the documentation requirements in the fall in hopes of speeding up the conversion process. But more needs to be done like the implementation of a standardized documentation form and the creation of a Web portal that will allow homeowners to track the receipt of the paperwork, he said. Also, it should allow servicers more flexibility in accepting alternative documents.