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 4.15 percent in December, based on loans closed. This represents a slight drop of 0.07 percent from totals of Novermber 2011.
The average interest rate on conventional, 30-year, fixed-rate mortgages (FRMs) of $417,000 or less decreased eight basis points to 4.32 percent in December. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages. These results reflect loans closed during the Dec. 23-30 period. Typically, the interest rate is determined 30-45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late November.
The contract rate on the composite of all mortgage loans (FRMs and ARMs) was 4.13 percent in December, down seven basis points from 4.20 percent in November. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.24 percent in December, down seven basis points from 4.31 percent in November.
Initial fees and charges were 0.83 percent of the loan balance in December, up 0.05 percent from 0.78 in November. Thirty-two percent of the purchase-money mortgage loans originated in December were "no-point" mortgages, down two percent from the share in November. The average term was 28.8 years in December, up 0.3 years from 28.5 years in November. The average loan-to-price ratio in December was 78.7 percent, up 1.6 percent from 77.1 percent in November. The average loan amount was $221,700 in December, up $1,200 from $220,500 in November.
