HOUSING FINANCE

Mortgage Interest Rates

Mortgage interest rates decreased between 26 and 30 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 8.02 percent in the third quarter of 2000, 30 basis points lower than the previous quarter but 19 basis points higher than the third quarter of 1999. Adjustable-rate mortgages in the third quarter were going for 7.27 percent, 24 basis points above the previous quarter and 114 basis points above the third quarter of 1999. Fixed-rate, 15-year mortgages, at 7.73 percent, were down 26 basis points during the third quarter but 29 basis points above the same quarter in 1999.

*The Department of Housing and Urban Development no longer collects interest rate data on FHA-insured loans. Sources: Federal Home Loan Mortgage Corporation; and 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 288,000 (not seasonally adjusted) properties in the third quarter of 2000, down 11 percent from the previous quarter and down 14 percent from the third quarter of 1999. Total endorsements or insurance policies issued totaled 231,600, down 28 percent from the third quarter of 1999. Purchase endorsements were 218,400, up 8 percent from the second quarter of 2000 but down 19 percent from the third quarter of 1999. Endorsements for refinancings declined to 13,200 or 7 percent from the previous quarter and decreased 75 percent from the third quarter a year ago.

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

PMI and VA Activity*

Private mortgage insurers issued 343,900 policies or certificates of insurance on conventional mortgage loans during the third quarter of 2000, up 7 percent from the second quarter but down 10 percent from the third quarter of 1999; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs reported the issuance of mortgage loan guaranties for 47,400 single-family properties in the third quarter of 2000, up 9 percent from the previous quarter but down 54 percent from the third quarter of 1999.

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

Delinquencies and Foreclosures

Total delinquencies were at 3.82 percent at the end of 2000’s second quarter, up 3 percent from the first quarter of 2000 but down 8 percent from the second quarter of 1999. Ninety-day delinquencies were at 0.54 percent, unchanged from the first quarter of 2000 but down 8 percent from the same quarter a year ago. During the second quarter of 2000, 0.26 percent of loans entered foreclosures, down 13 percent from the first quarter of 2000 and down 13 percent from the second quarter of the previous year.

Source: National Delinquency Survey, Mortgage Bankers Association