Mortgage Rates up But Still Below 5 Percent

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 4.94 percent with an average 0.7 point for the week ending December 17, 2009, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.19 percent.

The 15-year FRM this week averaged 4.38 percent with an average 0.6 point, up from last week when it averaged 4.32 percent. A year ago at this time, the 15-year FRM averaged 4.92 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.37 percent this week, with an average 0.6 point, up from last week when it averaged 4.26 percent. A year ago, the 5-year ARM averaged 5.60 percent.

The 1-year Treasury-indexed ARM averaged 4.34 percent this week with an average 0.5 point, up from last week when it averaged 4.24 percent. At this time last year, the 1-year ARM averaged 4.94 percent.

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

“Mortgage rates followed bond yields higher once again this week amid signs of an improving economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “On the consumer side, retail sales jumped 1.3 percent in November and consumer sentiment, as measured by the University of Michigan, rose above the market consensus forecast to the highest reading since September. Industrial production also showed large gains in November.

“Interest rates on 30-year fixed-rate mortgages have remained below five percent over the past seven weeks and are contributing to a wave of refinance activity. Roughly three out of four mortgage applications were for refinancing during the first two weeks of December, according the Mortgage Bankers Association.”

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.

SUMMARY OF SURVEY RESULTS

Fixed-Rate Mortgages

	Average Conventional 30-Year Commitment Rate	Fees & Points	Average Conventional 15-Year Commitment Rate	Fees & Points
US	4.94	0.7	4.38	0.6
Northeast	4.95	0.7	4.39	0.7
Southeast	4.94	0.6	4.40	0.6
North Central	5.00	0.6	4.37	0.6
Southwest	4.93	0.6	4.38	0.6
West	4.91	0.7	4.35	0.6

Five/One-Year Adjustable-Rate Mortgages

	First Commitment Rate	Fees & Points	Margin
US	4.37	0.6	2.74
Northeast	4.39	0.5	2.73
Southeast	4.18	0.7	2.75
North Central	4.63	0.6	2.74
Southwest	4.40	0.6	2.77
West	4.31	0.6	2.73

One-Year Adjustable-Rate Mortgages

	First Commitment Rate	Fees & Points	Margin
US	4.34	0.5	2.75
Northeast	4.11	0.5	2.73
Southeast	4.40	0.4	2.75
North Central	4.50	0.3	2.72
Southwest	4.50	0.6	2.83
West	4.36	0.7	2.75

Freddie Mac defines its regions as follows:

Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI, CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU

Freddie Mac's Primary Mortgage Market Survey (PMMS) is for informational purposes only and Freddie Mac is not responsible for business decisions made based on the reported results of the PMMS. Freddie Mac may change the methodology used to conduct the PMMS survey at any time and without notice.

Definitions

Commitment Rate is the interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.

ARM Index is the One-year Treasury

Loan to Value Ratio (LTV) is the ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.

Origination Fees and Discount Points are the total charged by the lender at settlement. One point equals one percent of the loan amount.

Margin is a fixed amount added to the underlying index to establish the fully indexed rate for an ARM.

Weighted Averages for the Primary Mortgage Market Survey have been adjusted as of December 17, 2009. The new weights use the dollar volume of conventional first-lien mortgage originations within the 1-unit Freddie Mac loan limit as reported under the Home Mortgage Disclosure Act (HMDA) for 2008. The weights are listed in the table below.

Freddie Mac Region	PMMS Weights
Northeast	26.0
Southeast	16.7
North Central	15.9
Southwest	13.2
West	28.2

PRIMARY MORTGAGE MARKET SURVEY RESULTS

December 17, 2009

30-Year Fixed Rate Mortgages

	US	NE	SE	NC	SW	W
Average	4.94	4.95	4.94	5.00	4.93	4.91
Fee & Points	0.7	0.7	0.6	0.6	0.6	0.7

15-Year Fixed Rate Mortgages

	US	NE	SE	NC	SW	W
Average	4.38	4.39	4.40	4.37	4.38	4.35
Fee & Points	0.6	0.7	0.6	0.6	0.6	0.6

5/1-Year Ajustable Rate Mortgages

	US	NE	SE	NC	SW	W
Average	4.37	4.39	4.18	4.63	4.40	4.31
Fee & Points	0.6	0.5	0.7	0.6	0.6	0.6
Margin	2.74	2.73	2.75	2.74	2.77	2.73

1-Year Ajustable Rate Mortgages

	US	NE	SE	NC	SW	W
Average	4.34	4.11	4.40	4.50	4.50	4.36
Fee & Points	0.5	0.5	0.4	0.3	0.6	0.7
Margin	2.75	2.73	2.75	2.72	2.83	2.75

The National Mortgage Rate Snapshot

	One Year Ago				One Week Ago
	30-YR	15-YR	5/1-YR	1-YR ARM	30-YR	15-YR	5/1-YR	1-YR ARM
Average	4.94	4.38	4.37	4.34	4.81	4.32	4.26	4.24
Fee & Points	0.7	0.6	0.6	0.5	0.7	0.6	0.5	0.7
Margin	N/A	N/A	2.74	2.75	N/A	N/A	2.74	2.76