The Federal Housing Finance Agency (FHFA) has reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some adjustable-rate mortgage (ARM) contracts, was 4.38 percent based on loans closed in September. This is a decrease of 0.18 percent from the previous month.
The average interest rate on conventional, 30-year, fixed-rate mortgages (FRMs) of $417,000 or less decreased seven basis points to 4.56 percent in September. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages. These results reflect loans closed during the period of Sept. 26-30. 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-August.
The contract rate on the composite of all mortgage loans (FRMs and ARMs) was 4.36 percent in September, down 16 basis points from 4.52 percent in August. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.49 percent in September, down 16 basis points from 4.65 percent in August. This report contains no data on ARMs due to insufficient sample size.
Initial fees and charges were 0.94 percent of the loan balance in September, up 0.04 percent from 0.90 in August. Twenty-nine percent of the purchase-money mortgage loans originated in September were "no-point" mortgages, down one percent from the share in August. The average term was 29 years in September, up 1.4 years from 27.6 years in August. The average loan-to-price ratio in September was 78.3 percent, up 1.1 percent from 77.2 percent in August. The average loan amount was $220,700 in September, up $6,400 from $214,300 in August.