HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates were nearly unchanged from the previous quarter. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 7.09 percent in the second quarter of 1998, 4 basis points higher than the previous quarter but 84 basis points lower than the second quarter of 1997. Adjustable-rate mortgages in the second quarter were going for 5.68 percent, 7 basis points above the previous quarter but 11 basis points below the second quarter of 1997. Fixed-rate, 15-year mortgages, at 6.74 percent, were up 9 basis points from the last quarter but down 72 basis points from the second quarter of 1997. The FHA rate decreased 1 basis point during the second quarter and was 100 basis points below the same quarter in 1997. It should be noted that we are reporting the average interest-rate quote for the FHA series rather than the most active quote.

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 380,800 (not seasonally adjusted) properties in the second quarter of 1998, unchanged from the previous quarter and up 30 percent from the second quarter of 1997. Endorsements or insurance policies issued totaled 244,600, down 4 percent from the first quarter of 1998 but up 24 percent from the second quarter of 1997. Endorsements for refinancing were 74,900, up 24 percent from the first quarter of 1998 and up 262 percent from a year earlier.

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

PMI and VA Activity*

Private mortgage insurers issued 367,800 policies or certificates of insurance on conventional mortgage loans during the second quarter of 1998, up 34 percent from the first quarter and up 57 percent from the second quarter of 1997; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties for 95,100 single-family properties in the second quarter of 1998, up 15 percent from the previous quarter and up 61 percent from the second quarter of 1997.

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

Delinquencies and Foreclosures

Total delinquencies were at 4.47 percent at the end of 1998's first quarter, up 3 percent from the fourth quarter of 1997 and up 3 percent from the first quarter of 1997. Ninety-day delinquencies were at 0.62 percent, unchanged from the fourth quarter of 1997 and up 11 percent from the first quarter of 1997. During the first quarter of 1998, 0.35 percent of loans entered foreclosures, 5 percent below the previous quarter and 5 percent below the first quarter of 1997.

Source: National Delinquency Survey, Mortgage Bankers Association