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Long Term Mortgage Rates Drift Lower for Third Consecutive Week

McLean, VA – Freddie Mac (NYSE:FRE) released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.63 percent with an average 0.4 point for the week ending July 3, 2007, down from last week when it averaged 6.67 percent. Last year at this time, the 30-year FRM averaged 6.79 percent.

The 15-year FRM this week averaged 6.30 percent with an average 0.4 point, down from last week when it averaged 6.34 percent. A year ago, the 15-year FRM averaged 6.44 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.29 percent this week, with an average 0.4 point, down from last week when it averaged 6.30 percent. A year ago, the 5-year ARM averaged 6.39 percent.

One-year Treasury-indexed ARMs averaged 5.71 percent this week with an average 0.4 point, up from last week when it averaged 5.65 percent. At this time last year, the 1-year ARM averaged 5.83 percent.

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

"Long-term mortgage rates continued to move lower for a third consecutive week, in part reflecting a moderation in core inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "In the statement accompanying their decision to leave the target federal funds rate unchanged, the Fed noted that core inflation had declined recently, though a 'sustained' moderation is still to be seen, and signaled that inflation risk continues to figure prominently in their policy decisions.

"Helping to ease some inflation concerns, May's personal consumption expenditures report found that the core price measure had increased 1.9 percent for the year ending in May, within the 1 percent to 2 percent range with which the Fed is comfortable, and the lowest year-over-year rise in more than 3 years."

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than four million renters in America.

Freddie Mac defines its regions as follows:

• Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, PR, ME, NH, VT, MA, RI, CT, VI
• Southeast: NC, SC, TN, KY, GA, AL, FL, 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 26, 2006. 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 2005.

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