MORTGAGE RATES CLIMB IN RESPONSE TO RECENT RISE IN BOND YIELDS

30-Year At Highest Rate Since Week Ending December 11, 2008
For Immediate Release June 4, 2009 CONTACT: corprel@freddiemac.com or (703) 903-3933 http://www.freddiemac.com/pmms/release.html?week=23&year=2009&display=release
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 5.29 percent with an average 0.7 point for the week ending June 4, 2009, up from last week when it averaged 4.91 percent. Last year at this time, the 30-year FRM averaged 6.09 percent. The 15-year FRM this week averaged 4.79 percent with an average 0.7 point, up from last week when it averaged 4.53 percent. A year ago at this time, the 15-year FRM averaged 5.65 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.85 percent this week, with an average 0.6 point, up from last week when it averaged 4.82 percent. A year ago, the 5-year ARM averaged 5.51 percent. One-year Treasury-indexed ARMs averaged 4.81 percent this week with an average 0.6 point, up from last week when it averaged 4.69 percent. At this time last year, the 1-year ARM averaged 5.06 percent. (Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.) “30-year fixed-rate mortgage rates caught up to the recent rise in long-term bond yields this week to reach a 25-week high,” said Frank Nothaft, Freddie Mac vice president and chief economist.” And the slowdown in the housing market has now detracted from economic growth for the past 13 quarters, the longest quarterly stretch since at least 1947, according to the Bureau of Economic Analysis. In the first quarter of 2009 alone, residential fixed investment shaved 1.4 percentage points off of real GDP growth, the most since third quarter of 2006. “Yet, there are signs that the housing market may be moderating. Housing affordability rose in April to the second highest reading since January 1971 when records began, according the National Association of Realtors® (NAR). As a result, pending existing home sales rose for the third consecutive month by 6.7 percent in April and represented the largest monthly increase since October 2001. Three of the four regions experienced increases, led by a 33 percent jump in the Northeast, the NAR reported.” 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 5.29 0.7 4.79 0.7
Northeast 5.31 0.8 4.81 0.7
Southeast 5.27 0.7 4.78 0.6
N. Central 5.32 0.6 4.82 0.6
Southwest 5.39 0.5 4.88 0.5
West 5.25 0.8 4.73 0.8
Five/One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 4.85 0.6 2.75
Northeast 4.76 0.5 2.74
Southeast 4.67 0.8 2.75
N. Central 5.04 0.6 2.74
Southwest 4.89 0.5 2.79
West 4.94 0.6 2.73
One-Year Adjustable-Rate Mortgages
First Commitment Rate Fees & Points Margin
US 4.81 0.6 2.75
Northeast 4.46 0.5 2.75
Southeast 5.08 0.6 2.75
N. Central 4.75 0.6 2.73
Southwest 5.10 0.5 2.81
West 4.84 0.6 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, PR, VI, MS 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 October 16, 2008. The new weights use the dollar volume of conventional mortgage originations within the 1-unit Freddie Mac loan limit as reported under Home Mortgage Disclosure Act (HMDA) for 2007. The weights are listed in the table below.
Freddie Mac Region PMMS Weights
Northeast 24.2
Southeast 19.8
North Central 15.1
Southwest 12.7
West 28.2

Primary Mortgage Market Survey Results June 4, 2009

30-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 5.29 5.31 5.27 5.32 5.39 5.25
Fees & Points 0.7 0.8 0.7 0.6 0.5 0.8
15-Year Fixed Rate Mortgages
US NE SE NC SW W
Average 4.79 4.81 4.78 4.82 4.88 4.73
Fees & Points 0.7 0.7 0.6 0.6 0.5 0.8
5/1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 4.85 4.76 4.67 5.04 4.89 4.94
Fees & Points 0.6 0.5 0.8 0.6 0.5 0.6
Margin 2.75 2.74 2.75 2.74 2.79 2.73
1-Year Adjustable Rate Mortgages
US NE SE NC SW W
Average 4.81 4.46 5.08 4.75 5.10 4.84
Fees & Points 0.6 0.5 0.6 0.6 0.5 0.6
Margin 2.75 2.75 2.75 2.73 2.81 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 6.09 5.65 5.51 5.06 4.91 4.53 4.82 4.69
Fees & Points 0.6 0.6 0.5 0.7 0.7 0.7 0.6 0.6
Margin N/A N/A 2.76 2.74 N/A N/A 2.75 2.77

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