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 3.56 percent based on loans closed in August. There was a decrease of 0.10 percent from the previous month. In March of 2012, FHFA began calculating interest rates using unweighted survey data.
The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 10 basis points to 3.74 in August. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages. These results reflect loans closed during the Aug. 27-31 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-July.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.56 percent in August, down nine basis points from 3.65 percent in July. The effective interest rate, which reflects the amortization of initial fees and charges, was 3.69 percent in August, down nine basis points from 3.78 percent in July. This report contains no data on adjustable-rate mortgages due to insufficient sample size.
Initial fees and charges were 1.07 percent of the loan balance in August, up 12 basis points from July. Eight percent of the purchase-money mortgage loans originated in August were "no-point" mortgages, down 12 percent from the share in July. The average term was 27.5 years in August, unchanged from July. The average loan-to-price ratio in August was 75.8 percent, down 0.3 percent from 76.1 percent in July. The average loan amount was $256,900 in August, down $2,000 from $258,900 in July.
