McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate dropped to tie the survey’s all-time low and the 15-year fixed-rate set another record low.

News Facts

30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.8 point for the week ending September 30, 2010, down from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 4.94 percent.

15-year FRM this week averaged a record low of 3.75 percent with an average 0.7 point, down from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent this week, with an average 0.6 point, down from last week when it averaged 3.54 percent. A year ago, the 5-year ARM averaged 4.42 percent.

1-year Treasury-indexed ARM averaged 3.48 percent this week with an average 0.7 point, up from last week when it averaged 3.46 percent. At this time last year, the 1-year ARM averaged 4.49 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 Frank Nothaft, vice president and chief economist, Freddie Mac.

"Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week. The September Consumer Confidence Index by the Conference Board fell to the lowest level since February of this year, while the Business Roundtable CEO Business Outlook for the third quarter was the weakest in the past four quarters. Consequently, rates for the 15-year fixed mortgage and the 5-year hybrid ARM reached new all-time lows and rates for 30-year fixed mortgages tied its record set just four weeks ago.

"Homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010 after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009, the Federal Reserve Board reported. This, in part, strengthened household balance sheets and reduced serious mortgage delinquencies. For instance, first mortgages 90-days delinquent or worse fell to 3.16 percent in August from 4.76 percent a year prior and was the lowest rate since June 2008, according to the S&P/Experian Consumer Credit Default Indices ."

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

According to S&P/Case-Shiller 20-city home price index, prices went up 0.6 percent in July compared with June while prices rose 3.2 percent compared with July 2009.

The weak readings reveal the ongoing strife in housing markets. Sales of both new and existing homes are well below the the standards set during the housing boom years. New home sales have been running at or near record lows.

"Anyone looking for home prices to return to the lofty 2005-2006 levels might be disappointed," said David Blitzer, spokesman for Standard and Poors. "Judging from the recent behavior of the housing market, stable prices seem more likely."

Analysts see the price gains as temporary and home values will dip in major markets next year and they expect a bigger wave of homes sold at foreclosure or through short sales.

Half the 20 cities have recorded gains over the past year. Leading is San Francisco with a 11.2 percent rise.

Las Vegas is the only market to have hit a new low during July. Prices there were 0.8 percent compared to the month earlier and were down 4.9 percent from 12 months ago.

The number of new homes in the market dropped 1.4 percent to 206,000 units, the lowest since August 1968.

The government report showed that the median price of new homes sold in July was $204,700, which was 0.5 percent below July’s level and more than 1 percent down from August 2009.

At the end of August, 206,000 new homes were for sale. At the current sales pace, the supply is 8.6 months of inventory.

Sales rose in the West by 54.3 percent in August. The Northeast and Midwest sales were up by 16.7 percent 26.1 percent respectively. Sales in the South dropped 10.8 percent.

News Facts

30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.7 point for the week ending September 23, 2010, unchanged from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 5.04 percent.

15-year FRM this week averaged a record low of 3.82 percent with an average 0.7 point, unchanged from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.54 percent this week, with an average 0.6 point, down slightly from last week when it averaged 3.55 percent. A year ago, the 5-year ARM averaged 4.51 percent.

1-year Treasury-indexed ARM averaged 3.46 percent this week with an average 0.7 point, up from last week when it averaged 3.40 percent. At this time last year, the 1-year ARM averaged 4.52 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 Frank Nothaft, vice president and chief economist, Freddie Mac.

"In its September 21st policy committee statement, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months. In addition, inflation was at levels somewhat below its comfort zone. The perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week.

"Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession; the one exception was the 1980 downturn. The National Bureau of Economic Research recently announced that the current recession ended in June 2009. Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September."

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

Apartment and condominium sector was up 32 percent from July while single-family homes grew 4.3 percent to 436,000 units.

“The vast majority of builders in this country operate small, single-family homebuilding firms and they are struggling to obtain acquisition, development and construction financing that will enable them to meet the current level of buyer demand and put more Americans back to work,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

Builders are struggling with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market. They benefited in the spring from federal tax credits, but those expired in April.

Applications for building permits, a sign of future construction activity, also surged 2 percent to an annual rate of 569,000. Gains can be attributed to apartment and condominium construction and not the much larger single-family homes sector.

Construction activity increased 34 percent in the West, 22 percent in the Midwest and 7 percent in the South. Construction dropped 24 percent in the Northeast.