HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates decreased between 41 and 44 basis points on the fixed-rate mortgages from the previous quarter. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 7.61 percent in the fourth quarter of 2000, 41 basis points lower than the previous quarter and 24 basis points lower than the fourth quarter of 1999. Adjustable-rate mortgages in the fourth quarter were going for 7.17 percent, 10 basis points below the previous quarter but 77 basis points above the fourth quarter of 1999. Fixed-rate, 15-year mortgages, at 7.29 percent, were down 44 basis points during the fourth quarter and 17 basis points below the same quarter in 1999.

*Mortgage loan interest rate data on FHA-insured loans are no longer collected by the U.S. Department of Housing and Urban Development. 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 265,000 (not seasonally adjusted) properties in the fourth quarter of 2000, down 8 percent from the previous quarter but up 5 percent from the fourth quarter of 1999. Total endorsements or insurance policies issued totaled 229,900, down 1 percent from the third quarter of 2000. Purchase endorsements were 212,100, down 3 percent from the third quarter of 2000 and down 6 percent from the fourth quarter of 1999. Endorsements for refinancings increased to 17,800, or 35 percent, from the previous quarter and decreased 34 percent from the fourth quarter a year ago. The annual number of applications received for 2000 was 1,154,600, up 17 percent from last year. Total endorsements declined 1 percent to 891,900. Purchase endorsements rose 18 percent to 826,700, and refinancings dropped to 65,200, a decline of 68 percent from 1999.

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

PMI and VA Activity*

Private mortgage insurers issued 326,200 policies or certificates of insurance on conventional mortgage loans during the fourth quarter of 2000, down 5 percent from the third quarter but up 8 percent from the fourth quarter of 1999; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties for 48,800 single-family properties in the fourth quarter of 2000, up 3 percent from the previous quarter but down 20 percent from the fourth quarter of 1999. The 2000 annual data for private mortgage insurers indicate that 1,236,200 certificates were issued, an increase of 15 percent from 1999. The VA issued 186,700 mortgage loan guaranties, down 31 percent from last year.

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

Delinquencies and Foreclosures

Total delinquencies were at 4.04 percent at the end of 2000’s third quarter, up 6 percent from the second quarter of 2000 but down 1 percent from the third quarter of 1999. Ninety-day delinquencies were at 0.56 percent, up 4 percent from the second quarter of 2000 but down 5 percent from the same quarter a year ago. During the third quarter of 2000, 0.31 percent of loans entered foreclosures, up 19 percent from the second quarter of 2000 and up 3 percent from the second quarter of the previous year.

Source: National Delinquency Survey, Mortgage Bankers Association