Wednesday, August 10, 2011

FHFA: Mortgage interest rates fall again in June

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 4.62 percent based on loans closed in June. This is a decrease of 0.12 percent from the previous month.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 13 basis points to 4.79 percent in June. 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 June 24-30 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-May.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.61 percent in June, down 14 basis points from 4.75 percent in May. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.74 percent in June, down 13 basis points from 4.87 percent in May.

This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.94 percent of the loan balance in June, up 0.09 percent from 0.85 in May. Twenty-eight percent of the purchase-money mortgage loans originated in June were "no-point" mortgages, matching the share in April and May. The average term was 28.2 years in June, up 0.3 years from 27.9 years in May. The average loan-toprice ratio in June was 76.3 percent, down 0.1 percent from 76.4 percent in May. The average loan amount was $219,100 in June, down $3,800 from $222,900 in May.

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