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30-YEAR, FIXED-RATE MORTGAGES PREFERRED IN AUGUST, FANNIE MAE SAYS; REFINANCING SPLITS BETWEEN 30-YEAR AND 15-YEAR LOANS

 WASHINGTON, Oct. 4 /PRNewswire/ -- Most consumers obtaining home mortgages in August chose 30-year, fixed-rate loans as interest rates on these mortgages continued falling in August to 25-year lows, according to information released today by the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM). Rates moved up somewhat in mid- September, the company said.
 According to Fannie Mae's Mortgage Market Update, 54.8 percent of mortgages Fannie Mae either bought or securitized in August were 30- year, fixed-rate home loans, compared to 53.4 percent of the company's mortgage business in July.
 The Fannie Mae information also revealed that more than 62.8 percent of Fannie Mae's activity in August was refinancing. Among homeowners refinancing, 47 percent chose 30-year, fixed-rate loans, compared with 42 percent selecting 15-year mortgages.
 Donna Callejon, Fannie Mae senior vice president for single-family marketing, said: "The fact that 30-year and 15-year loans are running almost neck and neck for people refinancing is solid evidence that when mortgage rates are low, most home buyers and homeowners look to the future and decide to lock in a fixed rate and often decide to pay off their loans faster.
 "Home buyers often want to buy as much home as they can afford while ensuring payment certainty, and refinancers frequently look for faster equity build-up as well as payment security," Callejon said. "Today's mortgage market is tailor-made for both groups and offers the best of both worlds -- low rates while providing payment certainty and the option to cut payment time in half with shorter term loans."
 Fannie Mae's Mortgage Market Update also showed that 15-year, fixed- rate mortgages represented 33.3 percent of the company's business in August, compared with 35.0 percent in July. Other mortgage types, including 20-year, fixed-rate mortgages, 7-year balloons, and 1-year, adjustable-rate mortgages (ARMs), all remained relatively unchanged in August from July, although the 7-year balloons moved up from 6.0 to 6.3 percent of activity during the period.
 Fannie Mae's commitment rate (the rate at which the company buys loans from lenders, excluding fees and points) on 30-year, fixed-rate mortgages declined to 6.70 through the first week of September from 6.90 percent in August and 7.06 percent in July. Rates on 15-year, fixed- rate mortgages fell even more sharply from August through the first week of September, from 6.41 to 6.19 percent. Fannie Mae's commitment rate for 1-year ARMs declined to 5.00 percent for the first week of September, compared with 5.13 percent in August.
 According to Callejon, mortgage rates were somewhat erratic in early September. She said Fannie Mae believes that mortgage rates will drift within a narrow range for the next few months, but are not expected to decline much more and might edge up later in the year. "Although the home sales market has been relatively brisk, potential home buyers who have been waiting for mortgage rates to bottom out before jumping into the market could spur home sales even more if rates stabilize," she said.
 Fannie Mae is a congressionally chartered, shareholder-owned company and the nation's largest source of funds for home mortgages.
 Mortgage Interest Rates
 30-yr 15-yr 7-yr 1-yr
 FRM FRM Balloon ARM
 Jan 92 8.32 7.88 7.57 6.07
 Feb 8.60 8.18 7.86 6.40
 Mar 8.83 8.45 8.28 6.86
 Apr 8.68 8.26 8.17 6.73
 May 8.55 8.10 8.01 6.71
 Jun 8.39 7.89 7.81 6.62
 Jul 7.95 7.40 7.15 6.02
 Aug 7.81 7.27 6.90 5.90
 Sep 7.72 7.12 6.67 5.62
 Oct 7.97 7.41 6.95 5.91
 Nov 8.24 7.74 7.37 6.38
 Dec 8.07 7.61 7.28 6.47
 Jan 93 7.84 7.32 6.93 6.26
 Feb 7.50 6.94 6.52 6.09
 Mar 7.35 6.83 6.38 5.27
 Apr 7.29 6.76 6.31 5.15
 May 7.36 6.81 6.35 5.05
 Jun 7.26 6.74 6.32 5.17
 Jul 7.06 6.56 6.16 5.09
 Aug (r) 6.90 6.41 6.04 5.13
 Sep
 (1st wk.) 6.70 6.19 5.85 5.00
 Note: Rates Based on Fannie Mae 60-Day Required Net Yield
 p -- preliminary
 Product Distribution of Fannie Mae Business(A)
 30-yr 20-yr 15-yr 7-yr
 FRM FRM FRM FRM(B) ARMs Other
 (in percent)
 Jan 91 65.0 0.7 11.5 12.1 10.0 0.8
 Feb 66.7 0.6 12.2 13.7 6.0 0.8
 Mar 65.9 0.7 15.6 12.8 4.1 0.9
 Apr 65.3 0.8 18.2 11.0 3.8 0.9
 May 64.8 1.0 20.3 10.2 3.1 0.7
 Jun 64.2 1.1 21.3 9.2 3.5 0.7
 Jul 66.2 1.1 18.3 9.1 4.5 0.9
 Aug 65.2 1.1 17.4 10.0 5.4 0.9
 Sep 63.7 1.2 16.8 10.7 6.7 0.9
 Oct 65.8 1.2 15.4 9.6 7.1 0.8
 Nov 64.9 1.6 19.4 8.1 5.3 0.8
 Dec 62.0 2.0 24.1 7.4 3.9 0.7
 1991ytd 64.8 1.2 18.3 9.9 5.0 0.8
 Jan92 59.2 2.4 26.9 6.5 4.5 0.4
 Feb 56.2 2.7 29.4 7.3 4.1 0.3
 Mar 52.8 3.0 33.1 7.0 3.9 0.3
 Apr 48.6 3.0 35.4 7.7 5.2 0.2
 May 46.3 2.8 35.1 8.0 7.5 0.2
 Jun 50.7 2.4 30.8 6.7 9.2 0.2
 Jul 55.8 2.1 26.9 6.1 8.7 0.3
 Aug 59.9 1.8 24.2 6.3 7.5 0.2
 Sep 60.6 1.6 25.0 6.4 6.1 0.2
 Oct 54.8 2.0 31.3 6.4 5.3 0.2
 Nov 51.2 2.1 35.3 6.3 4.9 0.2
 Dec 50.4 2.1 36.4 6.1 4.8 0.2
 1992ytd 52.7 2.4 31.9 6.7 6.1 0.2
 Jan 93 54.2 2.3 30.3 6.5 6.4 0.2
 Feb 53.3 1.8 31.3 6.6 6.7 0.2
 Mar 55.0 1.9 31.0 6.2 5.6 0.3
 Apr 57.4 2.0 29.6 5.9 4.8 0.3
 May 54.5 2.5 33.3 6.4 3.0 0.2
 Jun (r) 52.0 2.8 36.6 6.2 2.2 0.2
 Jul (r) 53.4 2.8 35.0 6.0 2.6 0.1
 Aug (p) 54.8 2.7 33.3 6.3 2.8 0.1
 (A) Based on current production (i.e. does not include seasoned product).
 (B) Includes Balloons and Two-Steps.
 r -- revised
 p -- preliminary
 -0- 10/4/93
 /CONTACT: Tom Marder, 202-752-7608, or Kevin Hawkins, 202-752-6720, both of Fannie Mae/
 (FNM)


CO: Fannie Mae ST: District of Columbia IN: FIN SU:

DC-MH -- DC011 -- 8315 10/04/93 11:13 EDT
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Date:Oct 4, 1993
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