Freddie Mac's issuance of MBS declined in May for the fifth consecutive month to a 27-month low as refinancing activity continues to wane.

The secondary market agency reported Friday morning that it issued $20.7 billion in MBS in May, down 8.8% from the prior month.  It is the lowest level of issuance since January 2009 when the government sponsored enterprise issued only $16.3 billion in MBS.

Freddie's monthly activity report shows it purchased or guaranteed $23.3 billion in mortgages in May and only $13.3 billion or 58% were refinancings.

Back in March, Freddie purchased $19.4 billion in refinanced loans -- comprising 72% of purchases.

At the height of the refinancing boom late last year, Freddie issued $45.8 billion in MSB in December while purchasing $40.7 billion in refinanced single-family loans that month. 

Meanwhile, Freddie's single-family delinquency rate continues to trend downward.

The serious delinquency rate (90 days or more past due) fell to 3.53% in May, down 4 basis points from the prior month.  A year ago, the GSE had a 4.06% serious delinquency rate.

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