HOUSING FINANCE

Mortgage Interest Rates

Interest rates on fixed-rate mortgages decreased approximately 16 basis points from the previous quarter and decreased between 32 and 37 basis points from a year ago. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 6.81 percent in the second quarter of 2002, 16 basis points lower than the previous quarter and 32 basis points lower than the second quarter of 2001. Adjustable-rate mortgages in the second quarter were going for 4.80 percent, 28 basis points below the previous quarter and 113 basis points below second quarter of 2001. Fixed-rate, 15-year mortgages, at 6.29 percent, were down 17 basis points from the first quarter of this year and down 37 basis points below the second quarter of 2001.

FHA 1-4 Family Mortgage Insurance*

Applications for FHA mortgage insurance on 1–4 family homes were received for 358,300 (not seasonally adjusted) properties in the second quarter of 2002, up 2 percent from the previous quarter but down 22 percent from the second quarter of 2001. Total endorsements or insurance policies issued totaled 314,900, down 11 percent from the first quarter of 2002. Purchase endorsements, at 219,600, were up 1 percent from the previous quarter and were up 18 percent from the second quarter of 2001. Endorsements for refinancings decreased to 95,200, a 31-percent decline from the first quarter, but were up 3 percent from the second quarter a year ago.

PMI and VA Activity*

Private mortgage insurers issued 564,800 policies or certificates of insurance on conventional mortgage loans during the second quarter of 2002, up 4 percent from the first quarter of 2002 and up 7 percent from the second quarter of 2001; these numbers are not seasonally adjusted. The Department of Veterans Affairs (VA) reported the issuance of mortgage loan guaranties on 71,100 single-family properties in the second quarter of 2002, down 24 percent from the previous quarter and down 2 percent from the second quarter of 2001.

Delinquencies and Foreclosures

Total delinquencies were at 4.65 percent at the end of 2002’s first quarter, unchanged from the fourth quarter of 2001 but up 6 percent from the first quarter of 2001. Ninety-day delinquencies were at 0.71 percent, down 3 percent from the fourth quarter of 2001 but up 9 percent from the first quarter a year ago. During the first quarter of 2002, 0.37 percent of loans entered foreclosure, unchanged from the fourth quarter of 2001 but up 16 percent from the first quarter of the previous year.