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Index Shows Interest Rates & Home Prices Increased in June

Interest rates on conventional purchase-money mortgages and home loan amounts increased from May to June, according to Federal Housing Finance Agency (FHFA) indices of new mortgage contracts.

The indices found that the national average contract mortgage rate for the purchase of previously occupied homes by combined lenders index and the average interest rate on all mortgage loans was 3.85 percent for loans closed in late June, an increase of 10 basis points from 3.75 percent in May.

FHFA also reported that the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.04 percent, an increase of 14 basis points from 3.90 in May. The effective interest rate, accounting for the addition of initial fees and charges over the life of the mortgage was 3.99 percent in June, up 9 basis points from 3.90 percent in May.

The average loan amount for all loans was $325,600 in May, up $14,700 from $310,900 in May, FHFA reports.

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Source: FHFA

Freddie Mac also released the results of its Primary Mortgage Market Survey (PMMS), revealing the downward fall of average 30-year fixed mortgage rates falling just below 4 percent.

The survey showed that the 30-year fixed-rate mortgage (FRM) averaged 3.98 percent with an average 0.6 point for the week ending July 30, 2015, a decrease from last week's rate of 4.04 percent. Last year, the 30-year FRM averaged 4.12 percent.

"Monday's 8 percent decline in Chinese stock prices triggered similar –though smaller–sell-offs in global equity markets," said Sean Becketti, chief economist, Freddie Mac. "The associated flight to quality drove U.S. Treasury yields down nearly five basis points. Accordingly, 30-year fixed-rate mortgages fell six basis points to 3.98 percent. The mortgage rate has bounced between 3.98 and 4.09 percent since the first full week of June, falling a bit when events overseas take a turn for the worse and rising when the clouds appear ready to part. With no clear direction coming from the Fed this afternoon, we expect more of the same in coming weeks."

This week, Freddie Mac reported that the 15-year FRM averaged 3.17 percent with an average 0.6 point, down from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.  The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.95 percent this week with an average 0.4 point, down from last week when it averaged 2.97 percent. The 1-year Treasury-indexed ARM averaged 2.52 percent this week with an average 0.3 point, down from last week when it averaged 2.54 percent.

"Recent housing data exhibited the same good news/bad news pattern as overseas developments," Becketti said. "Coming into this week, existing home sales for June and the latest FHFA house price measures both suggested a stronger tone in the housing market. However, this week brought nothing but bad–or at least weaker-than-expected –news. New home sales and pending home sales both weakened and the Case-Shiller house price indices, while positive, fell below the lower end of expectations. Finally, the inadvertent release of Fed staff projections increased uncertainty over the timing of future Fed rate moves."

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.
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