HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates for all categories of loans decreased from the previous quarter. The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac was 7.19 percent in the fourth quarter of 1997, 28 basis points lower than the previous quarter and 50 basis points lower than the fourth quarter of 1996. Adjustable-rate mortgages in the fourth quarter were going for 5.51 percent, 5 basis points below both the previous quarter and the fourth quarter of 1996. Fixed-rate, 15-year mortgages, at 6.75 percent, were down 26 basis points from last quarter and down 45 basis points from the fourth quarter of the previous year. The FHA rate decreased 25 basis points during the fourth quarter and was 52 basis points below the same quarter in 1996. 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 274,000 (not seasonally adjusted) properties in the fourth quarter of 1997, down 10 percent from the previous quarter but up 24 percent from the fourth quarter of 1996. Endorsements or insurance policies issued totaled 264,300, up 49 percent from the third quarter of 1997 and up 26 percent from the fourth quarter of 1996. Endorsements for refinancing were 33,000, up 101 percent from the third quarter of 1997 and up 82 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 267,000 policies or certificates of insurance on conventional mortgage loans during the fourth quarter of 1997, unchanged from the third quarter and up 11 percent from the fourth quarter of 1996; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties for 64,700 single-family properties in the fourth quarter of 1997, down 4 percent from the previous quarter and down 6 percent from the fourth quarter of 1996.

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

Delinquencies and Foreclosures

Total delinquencies were at 4.26 percent at the end of 1997's third quarter, unchanged from the second quarter and 2 percent above the third quarter of 1996. Ninety-day delinquencies were at 0.57 percent, down 2 percent from the second quarter of 1997 and down 3 percent from the third quarter of 1996. During the third quarter of 1997, 0.35 percent of loans entered foreclosures, 3 percent above the previous quarter and up 6 percent from the third quarter of 1996.

Source: National Delinquency Survey, Mortgage Bankers Association