FREDDIE MAC ECONOMISTS SAY THAT MORE EFFICIENT HOMES HAVE HELPED HOUSEHOLDS WEATHER THE INCREASED COST OF ENERGY IN 2004

In a new analysis released today, Freddie Mac economists noted that because American homes built in the last few years are nearly twice as energy efficient as the typical house built in the 1960s, the sharp rise in energy prices in 2004 put less strain on household finances than might have been expected.

“Crude oil prices have pulled back from a peak of $55.23 per barrel this past October, but as the nation enters its coldest season, oil prices are still considerably higher than the $30 a barrel of West Texas crude cost a year ago,” explained Frank Nothaft, Freddie Mac’s chief economist. “And while we are certainly feeling the increase in oil prices at the gas pump and maybe even in our heating bills, the cost to families would be much greater if not for improvements in home energy efficiency.”

According to data analyzed by Freddie Mac from the American Housing Survey (AHS), fuel costs as a percent of home value was about 0.8 percent between 2000 and 2003, versus about 1.8 percent before 1960 and an average of 1.3 percent in the oil shock decade of the 1970s. Freddie Mac estimates that home energy efficiency in 2004 continued to improve.

Freddie Mac is a stockholder-owned corporation established by Congress in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage passthrough securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened doors for one in six homebuyers and more than two million renters in America.

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