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FHFA Reports Falling Mortgage Interest Rates

The ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) reported Tuesday that mortgage interest rates fell based on loans closed in the last week of May.

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The average interest rate on a 30-year fixed-rate mortgage loan ($417,000 or less) decreased 17 basis points in May to 4.04 percent, the FHFA said.

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The contract rate on the composite of all mortgage loans was 3.78 percent, down 15 basis points from 3.93 percent in April.

The effective interest rate (reflecting the amortization of initial fees and charges) was 3.91 percent, down 12 basis points from April's 4.03 percent. Due to insufficient sample size, there was no data on adjustable-rate mortgages.

Rate changes are based on unweighted survey data. Because interest rates are determined 30-45 days before loans are closed, reported rates depict market conditions from mid- to late- April.

Initial fees and charges made up 1.03 percent of the loan balance in May, an increase of 13 basis points from April. Of the purchase-money mortgage loans originated in May, 13 percent were ""no-point"" mortgages, down 8 percent from April.

The average term was 27.7 years in May, an increase of 0.4 years from April. The average loan-to-price ratio was up 1.1 percent from April to 76.4 percent in May.

The average loan amount in May was $263,200, up from $256,200 the previous April.

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