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Federal Housing Finance Board Reports Mortgage Interest Rates
The Federal Housing Finance Board today reported that the average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less decreased 12 basis points to 5.98 percent in April. The average interest rate on 15-year, fixed-rate loans of $417,000 or less decreased 1 basis point to 5.65 percent in April. These rates pertain to mortgages closed during the April 24-30 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 March.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 5.96 percent in April
down 4 basis points from 6.00 percent in March. The effective interest rate, which reflects the amortization of
initial fees and charges, was 6.02 percent in April down 6 basis points from 6.08 percent in March. The average
contract rate on fixed-rate mortgages decreased 8 basis points to 5.98 percent in April, while the average contract
rate on adjustable-rate mortgages (ARMs) increased 6 basis points to 5.60 percent in April.
Initial fees and charges were 0.46 percent of the loan balance in April, down 0.06 percent from March. Fifty
percent of the purchase-money mortgage loans originated in April were "no-point" mortgages, up six percent from
forty-four percent in March. The average term was 28.1 years in April, unchanged from March. The average loan to-
price ratio in April was 77.2 percent, down 0.4 percent from 77.6 percent in March. The average loan amount
increased by $9,000 to $221,700 in April, while the average house purchase price increased $13,400 to $310,700.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined
Lenders, a popular ARM index, was 5.97 percent based on loans closed in April. This is a decrease of 0.06 percent
from the previous month. The May index value will be announced on June 25, 2008.
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 VA-guaranteed mortgages, refinancing loans, and
balloon loans. This month's data is based on 11,613 reported loans from 56 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 Board is an independent agency in the executive branch that oversees the safety,
soundness, and mission of the 12 regional Federal Home Loan Banks. The Banks are government-sponsored
enterprises created in 1932 to provide low-cost funding for housing finance. They have more than 8,100 financial
institutions as members, including commercial banks, savings and loans, insurance companies and federally
insured credit unions.
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