HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates increased between 39 and 96 basis points from the previous quarter. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 7.83 percent in the third quarter of 1999, 63 basis points higher than the previous quarter and 96 basis points higher than the third quarter of 1998. Adjustable-rate mortgages in the third quarter were going for 6.13 percent, 39 basis points above the previous quarter and 57 basis points above the third quarter of 1998. Fixed-rate, 15-year mortgages, at 7.44 percent, were up 62 basis points during the third quarter and 89 basis points above the same quarter in 1998. The FHA rate increased 78 basis points to 7.95 percent during the third quarter of this year and was 82 basis points above the same quarter in 1998.

Sources: Federal Home Loan Mortgage Corporation; Office of Housing, Department of Housing and Urban Development

FHA 1-4 Family Mortgage Insurance*

Applications for FHA mortgage insurance on 1-4 family homes were received for 335,300 (not seasonally adjusted) properties in the third quarter of 1999, down 20 percent from the previous quarter and down 11 percent from the third quarter of 1998. Total endorsements or insurance policies issued totaled 320,600, down 6 percent from the second quarter of 1998. Endorsements for refinancing were 268,700, up 9 percent from the second quarter, and up from 234,800, or 14 percent, from the third quarter of 1998. Refinancings declined to 51,900 or 46 percent from the previous quarter and decreased 39 percent from the third quarter a year ago.

*Units in thousands of properties. Source: Office of Housing, Department of Housing and Urban Development

PMI and VA Activity*

Private mortgage insurers issued 380,100 policies or certificates of insurance on conventional mortgage loans during the third quarter of 1999, down 1 percent from the second quarter and down 5 percent from the third quarter of 1998; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties for 102,400 single-family properties in the third quarter of 1999, down 22 percent from the previous quarter but up 1 percent from the third quarter of 1998.

*Units in thousands of properties. Sources: PMI-Mortgage Insurance Companies of America; VA-Department of Veterans Affairs

Delinquencies and Foreclosures

Total delinquencies were at 4.33 percent at the end of 1998's second quarter, down 3 percent from the first quarter of 1998 but up 2 percent from the second quarter of 1997. Ninety-day delinquencies were at 0.61 percent, down 2 percent from the first quarter of 1998 but up 5 percent from the second quarter of 1997. During the second quarter of 1998, 0.35 percent of loans entered foreclosures, unchanged from the previous quarter but 3 percent above the second quarter of 1997.

Source: National Delinquency Survey, Mortgage Bankers Association