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HUD Archives: News Releases

HUD No. 99-168
Further Information:For Release
In the Washington, DC area: 202/708-0685Friday
Or contact your local HUD officeAugust 27, 1999


WASHINGTON - The U.S. Department of Housing and Urban Development today released results of its latest survey of market conditions for fixed rate, long-term, level payment home loans as well as interest rates for home construction funds. The August 1, 1999, survey found that the most frequently quoted contract rate for HUD/FHA Section 203(b) mortgages being sold in the secondary market for immediate delivery was 8.00 percent. Typical prices for 8.00 percent contract interest rate loans produced a national average secondary market yield of 8.00 percent.

FHA secondary market yields declined slightly. Secondary market yields on the most frequently quoted Section 203(b) contract rate dropped 13 basis points for the U.S. average.

In the FHA primary mortgage market, the average FHA effective rate for all reported primary market quotes was 8.02 percent. Lenders reported that the most frequent rate being quoted to potential FHA homebuyers for 60 days or more "lock-in" commitments was 8.00 percent with an average of 43 basis points and an effective interest rate of 8.06 percent. Average basis points for the 8.00 percent primary rate were 100 basis points in the Middle Atlantic and Northeast regions, 50 basis points in the West, 20 basis points in the Southeast, and 13 basis points in the North Central. The Southwest quoted 0 basis points for the 8.00 primary interest rate.

The national average contract rates for commitments on conventional loans for new home loans in the primary mortgage market went up 16 basis points from 7.59 percent in July to 7.75 for August. Existing home loans went up 15 basis points from 7.61 percent to 7.77 percent for the same period.

The proportion of HUD offices reporting an adequate supply of construction funds on August 1 was 100 percent for FHA and for conventional financings. For the trend of builders' plans, in the latest survey the majority of builders remained in the stable building plan category for each home price class. The proportion on August 1 was 80 percent for low-priced homes, 76 percent for moderate- priced homes, and 71 percent for high-priced homes.

On August 1 the proportion of HUD Field Offices reporting a stable trend in builders' unsold inventory of new homes was 84 percent, while 14 percent noted a declining trend and only 2 percent reported an advancing situation. An advancing trend is indicative of a growing inventory of homes, meaning either over-production and/or slower new home sales. Conversely, a declining inventory of new homes indicates demand would be relatively stronger than supply. One year ago the proportion of offices reporting a stationary trend was 74 percent, a declining trend 20 percent, and 6 percent reported an advancing trend.

Date of next release: September 23, 1999
The entire news release and all tables are now available on the web.

Content Archived: January 20, 2009

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