Washington, DC—(ENEWSPF)—April 26, 2012. The Federal Housing Finance Agency (FHFA) 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 3.90 percent based on loans closed in March. Beginning in March, FHFA is calculating interest rates using un-weighted survey data. There was a decrease of 0.18 percent from the previous month. The complete Contract 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 24 basis points to 4.12 in March. 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 March 26-30 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-February.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.89 percent in March, down 16 basis points from 4.05 percent in February. The effective interest rate, which reflects the amortization of initial fees and charges, was 3.93 percent in March, down 24 basis points from 4.17 percent in February.
This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.93 percent of the loan balance in March, matching February. Twenty percent of the purchase-money mortgage loans originated in March were “no-point” mortgages, down eleven percent from the share in February. The average term was 27.3 years in March, down 1.5 years from 28.8 years in February. The average loan-to-price ratio in March was 74.8 percent, down 0.5 percent from 75.3 percent in February. The average loan amount was $247,100 in March, up $2,800 from $244,300 in February.
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 5,114 reported loans from 29 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 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.