Printer Friendly

REFINANCING LED TO LOWER MORTGAGE PAYMENTS, SHORTER LOAN TERMS IN FIRST QTR.; SHORTER TERM MORTGAGES GAIN IN MAY, FANNIE MAE INFORMATION SHOWS

 WASHINGTON, July 2 /PRNewswire/ -- Homeowners who refinanced during the first three months of 1993 benefited in two different ways, according to the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), the nation's largest source of home mortgage funds: they lowered their average mortgage rates by almost 2 percentage points and reduced their loan terms by an average of four years.
 Also, Fannie Mae said that intermediate-term mortgages increased in popularity in May, as homeowners took advantage of attractive rates to choose loans that allow a faster build-up of equity.
 According to Donna Callejon, Fannie Mae senior vice president for single-family marketing, "We've seen the wave of refinancing come through lenders' offices during the past few months, and that surge has now reached the secondary market. But unless rates move significantly lower, which we don't expect, refinancing likely will slow."
 Newly available information for May from the company shows that intermediate-term mortgages such as 15-year loans accounted for one- third of Fannie Mae's business. Overall, 30-year fixed-rate loans represented more than half -- 54.6 percent -- of the company's loan volume, while adjustable rate mortgages comprised less than 3 percent.
 In the first quarter, 38.7 percent of refinancers selected intermediate-term mortgages, compared with about a third during the two refinancing waves in 1992. Overall, 82.5 percent of homeowners refinancing during the January-March period chose fixed-rate loans.
 In May, 30-year fixed-rate loans accounted for 54.6 percent of the company's loan volume, a change from 57.4 percent in April, followed by 15-year mortgages at 33.5 percent, up from 29.6 percent, 7-year balloons at 6.4 percent, also up from 5.9 percent in April, and ARMs at 2.8 percent, down from 4.8 percent in April.
 Interest rates on 30-year fixed-rate mortgages averaged 7.36 percent during May, up from 7.29 percent in April, and the first increase since November 1992, when they were 8.24 percent. After continuing to move slowly higher in late May and early June, mortgages rates have drifted lower, now in the 7.35 percent range for 30-year fixed-rate home loans.
 Rates for 15-year loans were 6.81 percent, compared with 6.76 percent in April. ARMs were 5.05 percent, down from 5.15 percent in April, and 7-year balloons averaged 6.35 percent in May, up slightly from 6.31 percent in April.
 According to Callejon, Fannie Mae continues to anticipate higher home sales in the second half of the year, with 1993 closing as the best year for home sales since 1979, at 4.5 million units.
 Fannie Mae is a congressionally chartered, shareholder-owned company, and is the nation's largest source of home mortgage funds.
 Mortgage Rates
 Interest rates continued to fall in May as Fannie Mae's 60 day net required yield declined nearly 50 basis points from the average in January of 7.84 percent to the average in May of 7.36 percent. The average required net yield on 7-year balloons dropped by 58 basis points to 6.35 percent in February.
 Mortgage Interest Rates
 30-yr 15-yr 7-yr 1-yr
 FRM FRM Balloon ARM
 January 92 8.32 7.88 7.57 6.07
 February 8.60 8.18 7.86 6.40
 March 8.83 8.45 8.28 6.86
 April 8.68 8.26 8.17 6.73
 May 8.55 8.10 8.01 6.71
 June 8.39 7.89 7.81 6.62
 July 7.95 7.40 7.15 6.02
 August 7.81 7.27 6.90 5.90
 September 7.72 7.12 6.67 5.62
 October 7.97 7.41 6.95 5.91
 November 8.24 7.74 7.37 6.38
 December 8.07 7.61 7.28 6.47
 January 93 7.84 7.32 6.93 6.26
 February 7.50 6.94 6.52 6.09
 March 7.35 6.83 6.38 5.27
 April 7.29 6.76 6.31 5.15
 May 7.36 6.81 6.35 5.05
 Note: Rates Based on Fannie Mae 60-Day Required Net Yield
 Products
 During the first five months of 1993, the popularity of shorter-term fixed rate mortgages has increased. In May, 20-year, 15-year and 7-year loans comprised 42.4 percent of Fannie Mae's total loan volume, up from 39.1 in January 1993.
 Product Distribution of Fannie Mae Business(A)
 1992 & January - February 1993
 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
 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 54.6 2.5 33.5 6.4 2.8 0.2
 (A) Based on current production (i.e. does not include seasoned product).
 (B) Includes Balloons and Two-Steps.
 p -- Preliminary
 -0- 7/2/93
 /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 -- DCFNS1 -- 8032 07/02/93 07:35 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 2, 1993
Words:1211
Previous Article:CANANDAIGUA WINE COMPANY ANNOUNCES AGREEMENT IN PRINCIPLE TO ACQUIRE ASSETS OF VINTNERS INTERNATIONAL
Next Article:CAMBRIDGE NEUROSCIENCE DISCONTINUES ECTAPRAM, AN IN-LICENSED ORPHAN DRUG PRODUCT, AND REDIRECTS RESOURCES TO STROKE AND GROWTH FACTOR PROGRAMS
Topics:


Related Articles
Balloons on the rise.
FANNIE MAE, 23 MASSACHUSETTS LENDERS TO MAKE AVAILABLE $300 MILLION IN AFFORDABLE MORTGAGE LOANS ACROSS STATE
FANNIE MAE AND CONNECTICUT LENDERS TO MAKE AVAILABLE $100 MILLION IN AFFORDABLE MORTGAGE LOANS UNDER CHAMP PROGRAM
PACE OF REFINANCING REMAINS STRONG IN SEPTEMBER AS INTEREST RATES REMAIN LOW; CONSUMERS' APPETITE FOR 30-YEAR, FIXED-RATE MORTGAGES RISES
HOMEOWNERS REFINANCING IN 1993 SHAVED NEARLY FOUR YEARS OFF THEIR LOAN TERM, REDUCED THEIR INTEREST RATE, AND SAVED MORE THAN $60,000 IN INTEREST...
NEW FANNIE MAE DATA SHOWS VAST MAJORITY OF HOMEOWNERS STILL CHOOSING 30-YEAR, FIXED-RATE MORTGAGES DESPITE HOME LOAN INTEREST RATES INCREASE
TEXAS HOUSING FINANCE CORPORATIONS AND FANNIE MAE PROVIDE AFFORDABLE MORTGAGE FINANCING FOR HUNDREDS OF FIRST-TIME HOME BUYERS IN NORTH CENTRAL TEXAS
MORTGAGE MARKET TO IMPROVE OVER REST OF 1995, ACCORDING TO FANNIE MAE; 30-YEAR FIXED RATE MORTGAGES TO PREDOMINATE BY YEAR-END; WILL BOOST...
MORTGAGE MARKET TO SEE FIRST INCREASE IN ORIGINATIONS SINCE 1993, SAYS FANNIE MAE; FIXED RATE LOANS WILL PREDOMINATE, WITH CONTINUED AFFORDABILITY...

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters