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15-YEAR MORTGAGES REACH ALL-TIME HIGH IN POPULARITY IN JUNE AS REFINANCING CONTINUES, FANNIE MAE MORTGAGE MARKET UPDATE SHOWS

 WASHINGTON, Aug. 3 /PRNewswire/ -- Consumers chose 15-year, fixed- rate mortgages at the highest rate ever in June, as low mortgage rates fueled continued strong refinancing, according to information released today by the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM).
 The information in Fannie Mae's Mortgage Market Update showed that 36.6 percent of the mortgages Fannie Mae either bought or securitized in June were 15-year home loans --surpassing the previous high of 36.4 percent in December 1992.
 Donna Callejon, Fannie Mae senior vice president for single-family marketing, said, "While both short- and long-term interest rates have been low in recent weeks, giving consumers an unprecedented choice of affordable fixed- and adjustable-rate mortgages, the advantages of paying off one's loan and building equity faster are convincing many homeowners that 15-year loans are right for them."
 The relative mix between fixed-rate loans, adjustable-rate mortgages (ARMs), and shorter term balloon loans remained relatively stable. Thirty-year, fixed-rate mortgages accounted for 52.0 percent of Fannie Mae's business in June, compared to 54.5 percent in May. Together, 30-year, 20-year, and 15-year, fixed-rate loans were 91.4 percent of Fannie Mae's business in June, compared to 90.3 percent in May.
 Fannie Mae's Mortgage Market Update also showed that 7-year balloon loans were 6.2 percent of the company's business in June, little changed from 6.4 percent in April. ARMs accounted for 2.2 percent of Fannie Mae's business in June, compared to a revised 3.0 percent in May.
 Mortgage rates generally continued to move lower in July, although somewhat unevenly, following the May-to-June period when rates also fell. The Mortgage Market Update showed that average Fannie Mae posted rates (the rate of return Fannie Mae requires on mortgages its buys from lenders) declined in June from May for all mortgage types except 1-year ARMs, which rose to 5.17 percent in June from 5.05 percent in May. Average rates on 30-year, fixed-rate mortgages were 7.26 percent in June, compared to 7.36 percent in May. Rates on 15-year loans declined to 6.74 percent in June from 6.81 percent in May.
 Callejon said: "As mortgage rates have moved lower still, many of our lender customers have reported they have seen an upsurge in consumers applying for mortgages, both to refinance and to buy homes. If mortgage rates stay relatively low, as we expect they will, the country should see stronger home sales in addition to the record refinancing volume as the summer continues."
 Fannie Mae is a congressionally chartered, shareholder-owned company and is 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
 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
 June 7.26 6.74 6.32 5.17
 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
 Jan 92 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 (r) 54.5 2.5 33.3 6.4 3.0 0.2
 June (p) 52.0 2.8 36.6 6.2 2.2 0.2
 (A) Based on current production (i.e. does not include seasoned product).
 (B) Includes Balloons and Two-Steps.
 r - revised
 p - preliminary
 -0- 8/3/93
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM) CO: Fannie Mae ST: District of Columbia IN: FIN SU: ECO


KD-TW -- DC018 -- 8913 08/03/93 12:45 EDT
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Date:Aug 3, 1993
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