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 4.25 percent based on loans closed in January. This is an increase of 0.10 percent from the previous month.
The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less increased 1 basis point to 4.33 percent in January. 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 January 25-31 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-December.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.19 percent in January, up 6 basis points from 4.13 percent in December. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.31 percent in January, up 7 basis points from 4.24 percent in December.
This report contains no data on adjustable-rate mortgages due to insufficient sample size. Initial fees and charges were 0.82 percent of the loan balance in January, down 0.01 percent from 0.83 in December. Thirty-eight percent of the purchase-money mortgage loans originated in January were “no-point” mortgages, up six percent from the share in December. The average term was 28.3 years in January, down 0.5 years from 28.8 years in December. The average loan-to-price ratio in January was 75.5 percent, down 3.2 percent
from 78.7 percent in December. The average loan amount was $223,000 in January, up $1,300 from $221,700 in December.