Federal Housing Finance Agency Reports Mortgage Interest Rates

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Washington, DC – August 30, 2011 – (RealEstateRama) — The Federal Housing Finance Agency today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 4.57 percent based on loans closed in July. This is a decrease of 0.05 percent from the previous month. This ontract Rate series can be found at http://www.fhfa.gov/Default.aspx?Page=251.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 10 basis points to 4.69 percent in July. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note). These results reflect loans closed during the July 25-29 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-June.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.55 percent in July, down 6 basis points from 4.61 percent in June. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.67 percent in July, down 7 basis points from 4.74 percent in June.

This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.85 percent of the loan balance in July, down 0.09 percent from 0.94 in June. Thirty percent of the purchase-money mortgage loans originated in July were “no-point” mortgages, matching the share in May and June. The average term was 28.3 years in July, up 0.1 years from 28.2 years in June. The average loan-to-price ratio in July was 76.0 percent, down 0.3 percent from 76.3 percent in June. The average loan amount was $213,800 in July, down $5,300 from $219,100 in June.

Recorded information on this index is available by calling (202) 408-2940. For technical questions on this index, please call David Roderer at (202) 414-3106. The August index value will be announced on September 27, 2011.

Technical note: The data are based on a small monthly survey of mortgage lenders which may not be representative. Survey respondents are asked to report the terms and conditions on all conventional, single-family, fully amortized, purchase-money loans closed during the last five working days of the month. The sample is not a statistical sample but is rather a convenience sample. The data exclude FHA-insured and VA-guaranteed mortgages, refinancing loans, and balloon loans. This month’s data are based on 5,316 reported loans from 37 lenders, which may include savings associations, mortgage companies, commercial banks, and mutual savings banks.

The effective interest rate includes the amortization of initial fees and charges over a 10-year period, which is the historical assumption of the average life of a mortgage loan. The data are weighted to reflect the shares of mortgage lending by lender size and lender type as reported in the latest release of the Federal Reserve Board’s Home Mortgage Disclosure Act data.

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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than 5.7 trillion in funding for the U.S. mortgage markets and financial institutions

Contact:
Corinne Russell (202) 414-6921
Stefanie Johnson (202) 414-6376

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The Federal Housing Finance Agency (FHFA) was created on July 30, 2008, when the President signed into law the Housing and Economic Recovery Act of 2008.  The Act created a world-class, empowered regulator with all of the authorities necessary to oversee vital components of our country’s secondary mortgage markets – Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.  In addition, this law combined the staffs of the Office of Federal Housing Enterprise Oversight (OFHEO), the Federal Housing Finance Board (FHFB), and the GSE mission office at the Department of Housing and Urban Development (HUD).

Contact:

1700 G Street, NW
4th Floor
Washington, DC 20552
Phone: (866) 796-5595

Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376

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