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HUD RELEASES JANUARY SURVEY OF SECONDARY MARKET PRICES AND YIELDS AND INTEREST RATES FOR HOME LOANS
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 January 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 7.00 percent. Typical prices for 7.00 percent contract interest rate loans produced a national average secondary market yield of 7.06 percent.
Secondary market yields on the most frequently quoted Section 203(b) contract rate increased 1 basis point in the West and North Central regions and were unchanged in the Northeast, Southeast and Southwest.
In the FHA primary mortgage market, the average FHA effective rate for all reported primary market quotes was 6.95 percent. Lenders reported that the most frequent rate being quoted to potential FHA homebuyers for 60 days or more "lock-in" commitments was 7.00 percent with an average of 14 basis points and an effective interest rate of 7.02 percent. Average basis points for the 7.00 percent primary rate were 44 basis points in the North Central region, 8 basis points in the Southwest, 22 basis points in the West and zero basis points in the other regions.
The national average contract rates for commitments on conventional loans for new and existing homes in the primary mortgage market went down 1 basis point to 6.83 percent in new home loans, and down 2 basis points to 6.82 percent in existing home loans.
The proportion of HUD offices reporting an adequate supply of construction funds on January 1 was 100 percent for FHA and 100 percent 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 January 1 was 75 percent for low-priced homes, 71 percent for moderate-priced homes, and 67 percent for high-priced homes.
On January 1 the proportion of HUD Field Offices reporting a stable trend in builders' unsold inventory of new homes was 84 percent, while 16 percent noted a declining trend and none of the Offices 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 somewhat of a sellers' market, where demand would be relatively stronger than supply. One year ago the proportion of offices reporting a stationary trend was 80 percent, a declining trend 16 percent, and an advancing trend 4 percent.
Date of next release: February 23, 1999
The entire news release and all tables are now available on the web.
Content Archived: January 20, 2009