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MORTGAGE RATES AT NEAR 20-YEAR LOW CONTINUE POPULARITY OF FIXED-RATE MORTGAGES, FANNIE MAE SAYS

 WASHINGTON, Feb. 23 /PRNewswire/ -- Mortgage rates continuing at near 20-year lows have led consumers to continue choosing fixed-rate mortgages, although both balloon loans and adjustable rate mortgages (ARMs) have edged up in popularity, according to January information released today by the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), the nation's largest source of home mortgage funds.
 Fannie Mae reported that 87.5 percent of the mortgage loans in which the company invests were either 30-, 20-, or 15-year fixed-rate mortgages in January. The January 1993 fixed-rate loan percentage is off slightly, from a high of 88.9 percent in December 1992. It was 88.5 percent in January 1992. Fannie Mae data also revealed that mortgage rates fell for the second straight month in January to 7.84 percent -- the lowest level since September -- for the benchmark 30-year, fixed-rate loan, compared to 8.07 percent in December and 8.32 percent in January 1992.
 Donna Callejon, Fannie Mae's senior vice president for single- family marketing, said: "With mortgage rates remaining at low levels, even declining somewhat, consumers tend to prefer the payment predictability of fixed-rate loans. We expect that with home loan rates staying low, fixed-rate mortgages will be the loan of choice in 1993."
 The Fannie Mae mortgage information also showed that ARMs rose to 5.6 percent of new business volume in January, compared to
4.8 percent in December and 4.5 percent in January 1992. Seven-year balloon mortgages (including Two-Steps) increased their share to 6.7 percent in January from 6.1 percent in December. In January 1992, they accounted for 6.5 percent of Fannie Mae's purchases.
 According to the Fannie Mae report, 1992 was a big year for intermediate-term fixed-rate loans such as 15- and 20-year mortgages, and balloon loans, especially as consumers refinanced their mortgages.
 In particular, 15-year mortgages accounted for over one-third of all new loans purchased by Fannie Mae during the heavier refinance months of April and May and again in November and December. In addition, 20-year mortgages more than doubled their volume in 1992 at $5 billion compared with less than $2 billion in 1991, although their overall share of business remained modest at 2-3 percent.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company and is the nation's largest source of home mortgage funds.
 Product Distribution of Fannie Mae Business(A)
 30-yr 20-yr 15-yr 7-yr
 FRM FRM FRM FRMs(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
 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
 Jan 93 p 54.7 2.2 30.6 6.7 5.6 0.2
 (A) Based on current production (i.e. does not include seasoned
 product).
 (B) Includes Balloons and Two-Steps.
 p -- Preliminary
 Mortgage Rates
 Mortgage interest rates for 30-year fixed-rate mortgages (FRMs) rose about one quarter of 1 percentage point from the third quarter (7.83 percent) to the fourth quarter (8.09 percent). After increases in October and November, 30-year FRM rates began to decline in December. The low point for 1992 came in September and sparked another 2-3 month round of heavy refinancing. ARM rates remain below the 5.5 percent mark, but are not much of a factor given the historically low level of fixed rates.
 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
 Note: Rates Based on Fannie Mae 60-Day Required Net Yield
 -0- 2/23/93
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM)


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

DC -- DC010 -- 9398 02/23/93 12:03 EST
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Date:Feb 23, 1993
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