National home prices rose in June for a third straight month as it gained 3.6 percent from last year’s level according to the S&P/Case-Shiller Home Price Index released on Tuesday. Home prices also increased 4.4 percent in the second quarter after a 2.8 percent drop in the first quarter.

"While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's. "Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year."

Of the 20 metro areas tracked by the S&P/Case-Shiller home price indexes only one experienced a decline. The index is up 4.2 percent year-over-year.

Seventeen cities posted price gains on a monthly basis. The biggest monthly price increases were in Chicago, Detroit and Minneapolis. Prices climbed 2.5 percent in each of those cities compared to a month earlier.

Prices in Seattle and Phoenix were flat on a monthly basis. Home prices in Las Vegas fell 0.6 percent compared with a month earlier.

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), and for yet another week, fixed-rate mortgages reached record lows, while the 5-year adjustable rate remained tied at its low for this survey. (The 30-year fixed-rate survey began in 1971, the 15-year began in 1991, and the 5-year adjustable in 2005.)

News Facts

30-year fixed-rate mortgage (FRM) averaged 4.36 percent with an average 0.7 point for the week ending August 26, 2010, down from last week when it averaged 4.42 percent. Last year at this time, the 30-year FRM averaged 5.14 percent.

15-year FRM this week averaged a record low of 3.86 percent with an average 0.6 point, down from last week when it averaged 3.90 percent. A year ago at this time, the 15-year FRM averaged 4.58 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.56 percent this week, with an average 0.6 point, unchanged from last week when it also averaged 3.56 percent. A year ago, the 5-year ARM averaged 4.67 percent.

1-year Treasury-indexed ARM averaged 3.52 percent this week with an average 0.7 point, down slightly from last week when it also averaged 3.53 percent. At this time last year, the 1-year ARM averaged 4.69 percent.

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

Quotes

Attributed to Amy Crews Cutts, deputy chief economist, Freddie Mac.

"Existing home sales plunged 27 percent in July, while new homes fell 12 percent to a new all-time record low, which led to some market concerns that the housing market may slow the economic recovery. As a result, long-term bond yields fell to the lowest levels since January 2009, allowing fixed mortgage rates to ease to new record lows this week.

"Much of the slowdown in sales, however, was expected due to the recently expired homebuyer tax programs, which pulled through future home purchases into the first half of the year. For instance, average existing home sales over the first seven months of 2010 were nearly 8 percent higher than over the same period a year ago.

"Moreover, house prices still appear to be stabilizing. Nationally, house prices rose 0.9 percent on a seasonally-adjusted basis during the second quarter of this year this year after 11 consecutive quarterly declines, according to the Federal Housing Finance Agency's purchase only index. Eight of the nine census regions experienced positive gains, compared to none in the first quarter."

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 Commerce Department said Wednesday that new home sales unexpectedly dropped 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963. Year-over-year sales dropped 32.4 percent.

Home sales had surged in March and April as homebuyers hurried to get contracts signed as the $8,000 tax credit was about to end April 30.

In the latest government report, the median price of new homes sold was $204,000, almost 6 percent below June’s sales and a 4.8 percent off from July 2009’s sales.

An estimated 210,000 new homes were for sale at the end of July, the lowest since September 1968. Due to sluggish pace of home sales, increasing foreclosed properties, experts expect home prices will continue to decline and that inventory will take more than 9.1 months to sell such inventory up from 8 months of inventory in June. Six months of inventory is considered healthy.

New home sales declined nationwide. Sales dropped the most in the West, where sales declined more than 25 percent. In the Northeast, sales fell 13.9 percent. In the South and Midwest, sales dropped by just over 8 percent.

Existing home sales plunged sharply in July to their lowest level in 15 years, the National Association of Realtors reported Tuesday. The fall was for a third consecutive month as attributed to the expired homebuyer tax credit.

The National Association of Realtors report showed that existing home sales sank 27.2 percent in July last month to a seasonally adjusted annual rate of 3.83 million units, down from the downwardly revised rate of 5.26 million in June. Annually, year-over-year sales were 25.2 percent below last year’s level.

Home sales have been in a continuous decline despite mortgage rates falling to record lows. The homebuyer tax credit has expired and homebuyers become more concerned about the value of homes which remained flat in the past year and unemployment rate is stuck at 9.5 percent.

ARMs Unchanged This Week From Last

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), and for yet another week, the fixed-rate mortgages reached another low, while the 5-year adjustable rate remained tied at its low for this survey. (The 30-year fixed-rate survey began in 1971, the 15-year began in 1991, and the 5-year adjustable in 2005.)

News Facts

30-year fixed-rate mortgage (FRM) averaged 4.42 percent with an average 0.7 point for the week ending August 19, 2010, down from last week when it averaged 4.44 percent. Last year at this time, the 30-year FRM averaged 5.12 percent.

15-year FRM this week averaged a record low of 3.90 percent with an average 0.6 point, down from last week when it averaged 3.92 percent. A year ago at this time, the 15-year FRM averaged 4.56 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.56 percent this week, with an average 0.6 point, unchanged from last week when it also averaged 3.56 percent. A year ago, the 5-year ARM averaged 4.57 percent.

1-year Treasury-indexed ARM averaged 3.53 percent this week with an average 0.7 point, unchanged from last week when it also averaged 3.53 percent. At this time last year, the 1-year ARM averaged 4.69 percent.

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

Quotes

Attributed to Amy Crews Cutts, deputy chief economist, Freddie Mac.

"Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed mortgage rates have continued to fall. This week marks the ninth straight week in the Primary Mortgage Market Survey® that 30-year-fixed mortgage rates have met or set a new record low.

"This week's release of the Consumer Price Index indicates that current inflation is very low. The 12-month growth in the core consumer price index has held at only 0.9 percent for four straight months ending in July. The last time price growth was this low was the year ending January 1966.

"The housing market is in a lull following the expiration of the homebuyer tax credits. Single-family starts fell for the third straight month in July to an annual pace of 432,000 homes, the fewest since May 2009. In addition, homebuilder confidence fell for the third consecutive month in August to the lowest since March 2009, according to the NAHB/Wells Fargo Housing Opportunity Index . Even confidence among realtors was at a 16-month low in June, according to the National Association of Realtors ®."

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