HOUSING FINANCE

Mortgage Interest Rates

The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac decreased to 5.51 percent in the second quarter of 2003, 33 basis points lower than the previous quarter and 146 basis points lower than the second quarter of 2002. Adjustable-rate mortgages in the second quarter of 2003 were going for 3.66 percent, 21 basis points below the previous quarter and 143 basis points below second quarter of 2002. Fixed-rate, 15-year mortgages, at 4.87 percent, were down 33 basis points from the first quarter of this year and down 159 basis points from the second quarter of the past year.

FHA 1-4 Family Mortgage Insurance*

Applications for FHA mortgage insurance on 1–4 family homes were received for 525,800 (not seasonally adjusted) properties in the second quarter of 2003, up 22 percent from the previous quarter and up 47 percent from the second quarter of 2002. Total endorsements or insurance policies issued totaled 349,500, up 6 percent from the first quarter of 2003. Purchase endorsements, at 162,600, were down 2 percent from the previous quarter and down 26 percent from the second quarter of 2002. Endorsements for refinancings increased to 187,000, a 14-percent increase from the first quarter and up 96 percent from the second quarter a year ago.

PMI and VA Activity*

Private mortgage insurers issued 692,300 policies or certificates of insurance on conventional mortgage loans during the second quarter of 2003, up 10 percent from the first quarter of 2003 and up 23 percent from the second quarter of 2002; these numbers are not seasonally adjusted. The Department of Veterans Affairs (VA) reported the issuance of mortgage loan guaranties on 129,400 single-family properties in the second quarter of 2003, up 13 percent from the previous quarter and up 82 percent from the second quarter of 2002.

Delinquencies and Foreclosures

Total delinquencies were at 4.52 percent at the end of 2003’s first quarter, unchanged from the fourth quarter of 2002 but down 3 percent from the first quarter of 2002. Ninety-day delinquencies were 0.76, down 3 percent from the fourth quarter of 2002 but up 7 percent from the first quarter a year ago. During the first quarter of 2003, 0.37 percent of loans entered foreclosure, up 6 percent from the fourth quarter of 2002 but unchanged from the first quarter of the previous year.