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30-YEAR MORTGAGE ACTIVITY EDGES UP IN JULY; 30-YEAR FIXED MORTGAGE RATES FALL BELOW 7 PERCENT IN AUGUST-FIRST TIME SINCE 1968, FANNIE MAE REPORTS

 WASHINGTON, Sept. 1 /PRNewswire/ -- A higher proportion of consumers chose 30-year, fixed-rate mortgages in July compared with June as mortgage rates continued to decline during the month -- and they fell further during the first three weeks of August, breaking the 7 percent level for the first time since 1968, according to information released today by Federal National Mortgage Association (Fannie Mae) (NYSE: FNM).
 The company's Mortgage Market Update showed that 53.6 percent of mortgages Fannie Mae either bought or securitized in July were 30-year, fixed-rate home loans, compared to 52.0 percent of the company's mortgage business in June. At the same time, mortgage rate information calculated for the first three weeks of August shows that average Fannie Mae commitment rates on the benchmark 30-year, fixed-rate mortgages fell to 6.94 percent. Rates on 30-year, fixed-rate home loans were last under 7 percent -- at 6.97 percent -- in June 1968 before rising to 7.10 percent in July of that year.
 Donna Callejon, Fannie Mae senior vice president for single-family marketing, said, "After weeks of consistently low mortgage rates, further declines in July and August may spark additional refinancing and we hope will provide strength to existing and new home sales.
 "In fact, mortgage rates are at the lowest level in a generation, and should lead to the highest home sales since 1979," said Callejon.
 Fannie Mae's Mortgage Market Update also showed that 15-year, fixed- rate mortgages represented 35.2 percent of the company's business last month, compared with 36.6 percent in June.
 The Mortgage Market Update indicated that other mortgage types, including 20-year, fixed-rate mortgages, 7-year balloons, and 1-year, adjustable-rate mortgages (ARMs), all remained relatively unchanged in July from June.
 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 7.06 percent in July from 7.26 in June. Rates on 15-year, fixed-rate mortgages also fell during the first three weeks of August to 6.45 percent from 6.56 percent in July and 6.74 in June. Fannie Mae's commitment rate for 1-year ARMs remained virtually unchanged during the first three weeks of August at 5.08 percent, compared with 5.09 percent in July and 5.17 percent in June.
 According to Callejon, Fannie Mae expects mortgage rates to begin to stabilize in the next month or two and then drift slowly higher as the economy gains new momentum into the winter and early next year. "Mortgage rates are likely to edge up later in the year, but they will still be relatively low compared to recent years, and thus will bolster an already strong housing market," 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 (p) 7.06 6.56 6.16 5.09
 Aug(3 wks. p)6.94 6.45 6.07 5.08
 p -- preliminary
 Note: Rates Based on Fannie Mae 60-Day Required Net Yield
 Product Distribution of Fannie Mae Business(A)
 30-yr 20-yr 15-yr 7-yr
 FRM FRM FRM FRM(B) ARMs Other
 Jan 91 65.0 pct. 0.7 pct. 11.5 pct. 12.1 pct. 10.0 pct. 0.8 pct.
 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
 1991
 ytd 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
 1992
 ytd 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 52.0 2.8 36.6 6.2 2.2 0.2
 Jul(p) 53.6 2.8 35.2 6.0 2.3 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- 9/1/93
 /CONTACT: Tom Marder, 202-752-7608, or Kevin Hawkins, 202-752-6720, both of Fannie Mae/
 (FNM)


CO: Federal National Mortgage Association ST: District of Columbia IN: FIN SU: ECO

IH-DC -- DCFNS1 -- 7755 09/01/93 07:33 EDT
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Date:Sep 1, 1993
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