Mortgage Rates Surge

Mortgage interest rates on conventional purchase-money mortgages increased in February from the month prior according to data from the Monthly Interest Survey released by the Federal Housing Finance Agency (FHFA).

The data indicated that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was up 16 basis points to 4.28 percent for loans closed in late February from 4.12 percent recorded in January.

The survey provides monthly information on interest rates, loan terms, and house prices by property type, including new and previously occupied homes; by loan type (fixed- or adjustable-rate); and by lender type that includes savings associations, mortgage companies, and commercial and savings banks. It also provides information on 15-year and 30-year fixed-rate loans. The survey found that the average interest rate on all mortgage loans in February was 4.24 percent, up 14 basis points from 4.10 in January. The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.36 percent, up 17 basis points from 4.19 in January.

The effective interest rate on all mortgage loans was 4.34 percent in February, up 18 basis points from 4.16 in January, the data indicated. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

The survey found that borrowers were also taking larger loans in February with the average loan amount for all loans rising $13,500 to $311,900 in February, from $298,400 in January.

While the indices include data for 15-year mortgages and adjustable-rate mortgages, they do not include mortgages guaranteed or insured by either the FHFA or the U.S. Department of Veterans Affairs. The indices also exclude refinancing loans and balloon loans.