The Federal Housing Finance Agency (FHFA) today 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 4.15 percent based on loans closed in December. This is a decrease of 0.07 percent from the previous month.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 8 basis points to 4.32 percent in December. 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 December 23-30 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-November.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.13 percent in December, down 7 basis points from 4.20 percent in November. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.24 percent in December, down 7 basis points from 4.31 percent in November.

This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.83 percent of the loan balance in December, up 0.05 percent from 0.78 in November. Thirty-two percent of the purchase-money mortgage loans originated in December were “no-point” mortgages, down two percent from the share in November. The average term was 28.8 years in December, up 0.3 years from 28.5 years in November. The average loan-to-price ratio in December was 78.7 percent, up 1.6 percent from 77.1 percent in November. The average loan amount was $221,700 in December, up $1,200 from $220,500 in November.