The Federal Housing Finance Agency this week reported that 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 4.57 percent based on loans closed in July. This is a decrease of 0.05 percent from the previous month.
The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 10 basis points to 4.69 percent in July. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note). These results reflect loans closed during the July 25-29 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-June.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.55 percent in July, down 6 basis points from 4.61 percent in June. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.67 percent in July, down 7 basis points from 4.74 percent in June.
This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.85 percent of the loan balance in July, down 0.09 percent from 0.94 in June. Thirty percent of the purchase-money mortgage loans originated in July were “no-point” mortgages, matching the share in May and June. The average term was 28.3 years in July, up 0.1 years from 28.2 years in June. The average loan-to-price ratio in July was 76.0 percent, down 0.3 percent from 76.3 percent in June. The average loan amount was $213,800 in July, down $5,300 from $219,100 in June.