HOUSING FINANCE

Mortgage Interest Rates

The contract mortgage interest rate for 30-year, fixed-rate, conventional mortgages reported by Freddie Mac declined to 6.29 percent in the third quarter of 2002, 52 basis points lower than the previous quarter and 68 basis points lower than the third quarter of 2001. Adjustable-rate mortgages in the third quarter were going for 4.39 percent, 41 basis points below the previous quarter and 127 basis points below third quarter of 2001. Fixed-rate, 15-year mortgages, at 5.71 percent, were down 58 basis points from the second quarter of this year and down 80 basis points below the third quarter of 2001.

FHA 1-4 Family Mortgage Insurance*

Applications for FHA mortgage insurance on 1-4 family homes were received for 414,300 (not seasonally adjusted) properties in the third quarter of 2002, up 15.6 percent from the previous quarter and up 2.4 percent from the third quarter of 2001. Total endorsements or insurance policies issued totaled 286,700, down 8.9 percent from the second quarter of 2002. Purchase endorsements, at 203,000, were down 7.5 percent from the previous quarter and were down 8.3 percent from the third quarter of 2001. Endorsements for refinancings decreased to 83,700, a 12.2-percent decline from the second quarter and down 12.4 percent from the third quarter a year ago.

PMI and VA Activity*

Private mortgage insurers issued 548,500 policies or certificates of insurance on conventional mortgage loans during the third quarter of 2002, down 2.9 percent from the second quarter of 2002 but up 6.2 percent from the third quarter of 2001; these numbers are not seasonally adjusted. The U.S. Department of Veterans Affairs (VA) reported the issuance of mortgage loan guaranties on 71,800 single-family properties in the third quarter of 2002, up 0.9 percent from the previous quarter but down 9.3 percent from the third quarter of 2001.

Delinquencies and Foreclosures

Total delinquencies were at 4.77 percent at the end of 2002’s second quarter, up 3 percent from the first quarter of 2002 and up 3 percent from the second quarter of 2001. Ninety-day delinquencies were 0.78, up 10 percent from the first quarter of 2002 and up 13 percent from the second quarter a year ago. During the second quarter of 2002, 0.40 percent of loans entered foreclosure, up 8 percent from the first quarter of 2002 and up 11 percent from the second quarter of the previous year.