Publication Date:
Tue, 2009-07-28 09:54
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-May.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 5.08 percent in June, up 21 basis points from 4.87 percent in May. The effective interest rate, which reflects the amortization of initial fees and charges, was 5.16 percent in June, up 21 basis points from 4.95 percent in May.
This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.58 percent of the loan balance in June, unchanged from May. Forty-five percent of the purchase-money mortgage loans originated in June were "no-point" mortgages, up from forty-four percent in May. The average term was 28.5 years in June, up 0.2 years from 28.3 years in May. The average loan-to-price ratio in June was 74.4 percent, up from 74.2 percent in May. The average loan amount increased by $11,800 to $233,000 in June.
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 5.09 percent based on loans closed in June. This is an increase of 0.21 percent from the previous month. This Contract rate series can be found at www.fhfb.gov [1].
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The MIRS was previously released by the Federal Housing Finance Board (FHFB). Recorded information on this index is available by calling (202) 408-2940. For technical questions on this index, please call David Roderer at (202) 408-2540. The July index value will be announced on August 27, 2009.
Technical note: The data is based on a monthly survey of major lenders that are asked to report the terms and conditions on all conventional, single-family, fully amortized, purchase-money loans closed the last five working days of the month. The data thus excludes FHA-insured and VAguaranteed mortgages, refinancing loans, and balloon loans. This month's data is based on 9,305 reported loans from 49 lenders, representing 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 data is weighted to reflect the shares of mortgage lending by lender size and lender type as reported in the latest release of the Federal Reserve Board’s Home Mortgage
Disclosure Act data.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan
Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S.
mortgage markets and financial institutions.
