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 4.08 percent based on loans closed in February. Beginning this month, FHFA is calculating interest rates using unweighted survey data. For January, a comparable rate based on unweighted data would have been 4.18 percent. Thus, there was a decrease of 0.10 percent from the previous month’s corresponding unweighted rate.
The average interest rate on conventional, 30-year, fixed-rate mortgages (FRMs) of $417,000 or less decreased five basis points to 4.36 percent from January’s figure based on unweighted data. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages. These results reflect loans closed during the Feb. 23-29 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-January.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.05 percent in February, down nine basis points from 4.14 percent, based on unweighted data, in January. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.17 percent in February, down 10 basis points from 4.27 percent, based on unweighted data, in January. This report contains no data on ARMs due to insufficient sample size.
Initial fees and charges were 0.93 percent of the loan balance in February, up 0.04 percent from 0.89, based on unweighted data, in January. Thirty-one percent of the purchase money mortgage loans originated in February were "no-point" mortgages, down three percent from the unweighted share in January. The average term was 28.8 years in February, up 0.1 years from an unweighted 28.7 years in January. The average loan-to-price ratio in February was 75.3 percent, down 0.4 percent from 75.7 percent, unweighted, in January. The average loan amount was $244,300 in February, up $7,300 from an unweighted $237,000 in January.
