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 5.97 percent with an average 0.7 point for the week ending November 26, 2008, down from last week when it averaged 6.04 percent.  Last year at this time, the 30-year FRM averaged 6.10 percent.  The 30-year FRM has not been this low since October 9, 2008, when it was 5.94 percent.

The 15-year FRM this week averaged 5.74 percent with an average 0.7 point, up slightly from last week when it averaged 5.73 percent.  A year ago at this time, the 15-year FRM averaged 5.73 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.86 percent this week, with an average 0.6 point, down slightly from last week when it averaged 5.87 percent.  A year ago, the 5-year ARM averaged 5.86 percent.

One-year Treasury-indexed ARMs averaged 5.18 percent this week with an average 0.5 point, down from last week when it averaged 5.29 percent.  At this time last year, the 1-year ARM averaged 5.43 percent.

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

"Interest rates for 30-year fixed-rate mortgages fell for the fourth consecutive week as signs the overall economy is flagging lowered most interest rates market-wide," said Frank Nothaft, Freddie Mac vice president and chief economist.  "And economic growth in the third quarter was revised downward this week, led by the first decline in consumer spending since the fourth quarter of 1991 and the largest drop since the second quarter of 1980.

"However, declining house prices and low mortgage rates have raised housing affordability in September to the highest level since February of this year, according to the National Association of Realtors® (NAR)."

Mortgage Cash-Out Refinance Share in First half of 2008 Lowest in Three Years - Volume of Equity Cashed out was $38 Billion in 2nd Quarter: One-half Year ago amount.

In the second quarter of 2008, 66 percent of Freddie Mac-owned loans that were refinanced resulted in new mortgages with loan amounts that were at least 5 percent higher than the original mortgage balances, according to Freddie Mac's quarterly refinance review. The second-quarter share was up slightly from an upward-revised first quarter share of 58 percent. Taken together, the first six months of this year marked the lowest cash-out share since the autumn and winter of 2004-2005.

"Declining home values across much of the nation have curtailed the amount of home equity available to be cashed out by homeowners," noted Frank Nothaft, Freddie Mac vice president and chief economist.

"Homeowners benefited from the low level of mortgage rates that prevailed for much of the second quarter. On average, homeowners who refinanced during the second quarter lowered their coupon rate by about one-half of a percentage point," observed Nothaft. In the second quarter of 2008, the median ratio of new-to-old interest rate was 0.93. In other words, one-half of those borrowers who paid off their original loan and took out a new one decreased their first-mortgage coupon rate by about 7.5 percent.

"Nine percent of homeowners reduced their loan amount while refinancing during the first half of this year. This is the largest cash-in share since the summer of 2005. This may reflect more cautious underwriting by lenders, resulting in homeowners paying down their loan balance in order to receive more favorable loan rates and terms.

"Homeowners who refinanced last quarter had kept their previous loan for nearly three and a quarter years – about 10 months longer than loans refinanced in the first quarter. This means that many loans refinanced last quarter had the benefit of additional appreciation during 2005, and homeowners had built up more home equity," Nothaft commented.

"During the second quarter about $38 billion in home equity was cashed out through refinance of conventional loans made to prime borrowers, less than one-half the $79 billion cashed out during the same period in 2007. In total, about $68 billion in home equity was cashed out over the first six months of 2008, the least since the first six months of 2004," said Amy Crews Cutts, Freddie Mac deputy chief economist.

These estimates come from a sample of properties on which Freddie Mac has funded at least two successive loans. Transactions are further screened to verify that the latest loan is for refinance rather than for home purchase. The Freddie Mac analysis does not track the use of funds made available from these refinances.