HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates decreased between 15 and 16 basis points on the fixed-rate mortgages from the previous quarter and decreased between 105 and 123 basis points from a year ago. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 6.97 percent in the third quarter of 2001, 16 basis points lower than the previous quarter and 105 basis points lower than the third quarter of 2000. Adjustable-rate mortgages in the third quarter were going for 5.66 percent, 27 basis points below the previous quarter and 161 basis points below the third quarter of 2000. Fixed-rate, 15-year mortgages, at 6.51 percent, were down 15 basis points during the third quarter and 123 basis points below the same quarter in 2000.

FHA 1-4 Family Mortgage Insurance*

Applications for FHA mortgage insurance on 1–4 family homes were received for 404,500 (not seasonally adjusted) properties in the third quarter of 2001, down 12 percent from the previous quarter but up 40 percent from the third quarter of 2000. Total endorsements or insurance policies issued totaled 317,000, up 14 percent from the second quarter of 2001. Purchase endorsements at 221,500 were up 19 percent from the second quarter of 2001 and were up 1 percent from the third quarter of 2000. Endorsements for refinancings increased to 95,500, a 3-percent rise from the previous quarter, and were up 624 percent from the third quarter a year ago.

PMI and VA Activity*

Private mortgage insurers issued 516,400 policies or certificates of insurance on conventional mortgage loans during the third quarter of 2001, down 2 percent from the second quarter of this year but up 50 percent from the third quarter of 2000; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties on 79,100 single-family properties in the third quarter of 2001, up 9 percent from the previous quarter and up 67 percent from the third quarter of 2000.

Delinquencies and Foreclosures

Total delinquencies were at 4.63 percent at the end of 2001’s second quarter, up 6 percent from the first quarter of 2001 and up 21 percent from the second quarter of 2000. Ninety-day delinquencies were at 0.69 percent, up 6 percent from the first quarter of 2001 and up 28 percent from the second quarter a year ago. During the second quarter of 2001, 0.36 percent of loans entered foreclosures, up 16 percent from the first quarter of 2001 and up 33 percent from the second quarter of the previous year.