The Federal Housing Finance Agency (FHFA) recently reported that 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 (ARM) contracts, was 3.67 percent based on loans closed in June. Beginning in March, FHFA is calculating interest rates using unweighted survey data. There was a decrease of 0.11 percent from the previous month.

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 16 basis points to 3.88 in June. These rates are calculated from theFHFA’s Monthly Interest Rate Survey of purchase-money mortgages.

These results reflect loans closed during the June 25 – 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-May.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.67 percent in June, down 11 basis points from 3.78 percent in May. The effective interest rate, which reflects the amortization of initial fees and charges, was 3.81 percent in June, down 10 basis points from 3.91 percent in May.

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

Initial fees and charges were 1.07 percent of the loan balance in June, up 4 basis points from May. Seventeen percent of the purchase-money mortgage loans originated in June were “no-point” mortgages, up four percent from the share in May. The average term was 27.5 years in June, down 0.2 years from 27.7 years in May. The average loan-to-price ratio in June was 75.6 percent, down 0.8 percent from 76.4 percent in May. The average loan amount was $263,200 in June, unchanged from May.

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