The United States Federal Housing Finance Agency reported that the average interest rate on a conventional 30-year, fixed-rate, mortgage loans of $417,000 or less increased 1 basis point to 4.88 percent in May. The average interest rate on a 15-year, fixed-rate loans of $417,000 or less decreased 4 basis points to 4.71 percent in May. These rates are calculated from the Federal Housing Finance Agency's Monthly Interest Rate Survey of purchase-money mortgages. The results reflect loans closed during the May 22-31 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 April.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.87 percent in May down 1 basis point from 4.88 percent in April. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.95 percent in May down 1 basis point from 4.96 percent in April. The Federal Housing Finance Agency's report contains no data on adjustable-rate mortgages due to insufficient sample size.
Initial fees and charges were 0.58 percent of the loan balance in May, up 0.01 percent from 0.57 in April. Forty-four percent of the purchase-money mortgage loans originated in May were "no-point" mortgages, up from forty-five percent in April. The average term was 28.3 years in May, unchanged from April. The average loan-to-price ratio in May was 74.2 percent, down from 75.1 percent in April. The average loan amount increased by $4,200 to $221,200 in May.
The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some adjustable rate mortgage contracts, was 4.88 percent based on loans closed in May. This is unchanged from the previous month. This Contract rate series can be found at www.fhfb.gov.
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