Washington, DC – Nationally, interest rates on mortgages decreased from May to June, according to an index of new mortgage contracts.
According to the Federal Housing Finance Agency (FHFA), the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.08 percent for loans closed in late June. The index is calculated using FHFA's Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.09 percent in June, a decrease from 4.13 percent in May.
Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, the June index reflects market rates from mid-to-late May. The effective interest rate was 4.24 percent in June, down 4 basis points from 4.28 percent in May. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
FHFA's interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.34 in June, a decrease of 3 basis points. The average loan amount for all loans was $292,200 in June, up $9,600 from $282,600 in May.
FHFA will release June index values Thursday, August 28th, 2014.
For more information, call David Roderer at (202) 649-3206. You can hear recorded index information by calling (202) 649-3993. You can find the complete contract rate series at http://www.fhfa.gov/data/mirs.
Source: FHFA
Technical note: The index is based on a small monthly survey of mortgage lenders, which may not be representative. The sample is not a statistical sample but is rather a convenience sample. Survey respondents were asked to report terms and conditions of all conventional, single-family, fully amortized purchase-money loans closed during the last five working days of the month. The index does not include mortgages either guaranteed or insured by either the Federal Housing Administration or the U.S. Department of Veterans Affairs. The index also excluded refinancing loans and balloon loans. June 2014 values are based on 6,842 reported loans from 25 lenders, which include 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 (the historical assumption of the average life of a mortgage loan).
Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030