November 1998

Secondary Market Prices & Yields

and Interest Rates for Home Loans

● Secondary Market Prices/Yields/Interest Rates Press Release

● Net Prices and Average Yields

● Most Frequently Quoted Contract Rates and Yields

● Effective FHA Primary Rates

● FHA Primary Market Rates

● Average Interest Rates on Conventional First Mtgs

● Average Interest Rate for Home Construction Financing

● Trend of Builders' Plans Compared to Previous Month

● Unsold Inventory of New Homes Compared to Previous

Last revised: December 11, 1998

HUD Secondary Market Prices & Yields - November 1998

http://www.hud.gov/fha/comp/rpts/sec/sec98nov.html [11/1/1999 5:08:34 PM]
Secondary Market Report November 1998

Secondary Market Prices and Yields

and Interest Rates for Home Loans

November 1, 1998

News Release

HUD No. 98-631 FOR RELEASE:

L. Richard Keyser (202) 755-7500 x137 November 30, 1998

www.hud.gov/fha/comp/rpts/fharpts.html.

 WASHINGTON – The U.S. Department of Housing and Urban Development today 

released the results of its latest survey of market conditions for fixed rate, 

long-term, level payment home loans as well as interest rates for home construction funds.

 The November 1, 1998, survey found that the most frequently quoted contract 

rate for HUD/FHA Section 203(b) mortgages being sold in the secondary market for 

immediate delivery was 7.00 percent. Typical prices for 7.00 percent contract

interest 

rate loans produced a national average secondary market yield of 7.07 percent.

 FHA secondary market yields were up in all regions. Changes in secondary 

market yields on the most frequently quoted Section 203(b) contract rate ranged from 

an increase of 50 basis points in the Southeast and Southwest regions to an increase 

of 60 basis points in the West. 

 In the FHA primary mortgage market, the average FHA effective rate for all 

reported primary market quotes was 6.94 percent. Lenders reported that the most 

frequent rate being quoted to potential FHA homebuyers for 60 days or more "lock-in" 

commitments was 7.00 percent with an average of 30 basis points and an effective 

interest rate of 7.04 percent.

 Average basis points for the 7.00 percent primary rate were: zero basis

points 

in the Northeast, 17 basis points in the Southeast, 33 basis points in the North 

Central, 50 basis points in the Southwest, and 19 basis points in the West.

 The national average contract rates for commitments on conventional loans for 

new and existing homes in the primary mortgage market went up 22 basis points to 6.86 

percent in new home loans, and up 20 basis points to 6.85 percent in existing home

loans. 

HUD Secondary Market Prices and Yields November

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 The proportion of HUD offices reporting an adequate supply of construction

funds 

on November 1 was 98 percent for FHA and 98 percent for conventional financings.

 For the trend of builders' plans, in the latest survey the majority of

builders 

remained in the stable building plan category for each home price class. The

proportion 

on November 1 was 76 percent for low-priced homes, 64 percent for moderate-priced

homes, 

and 60 percent for high-priced homes.

 On November 1, the proportion of HUD Field Offices reporting a stable trend

in 

builders' unsold inventory of new homes was 75 percent, while 14 percent noted a

declining 

trend and 11 percent an advancing situation. 

 An advancing trend is indicative of a growing inventory of homes, meaning

either 

over-production and/or slower new home sales. Conversely, a declining inventory of

new 

homes indicates somewhat of a sellers' market, where demand would be relatively

stronger 

than supply. One year ago the proportion of offices reporting a stationary trend was 

78 percent, a declining trend 13 percent, and an advancing trend 9 percent.

# # # #

Date of next release: November 24, 1998

The entire news release and all tables are now available on the Web:

 http://www.hud.gov/fha/comp/rpts/fharpts.html.

HSG/FHA Home Page | Reports Menu | Email Us

Date Last Modified: 12/01/98

HUD Secondary Market Prices and Yields November

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Secondary Market Report November 1998

TABLE 1

Net Prices and Average Yields for HUD-Insured

New Home Mortgages (Section 203) Immediate Delivery

Transactions 30-year Maturity - Minimum Downpayment

 7.00% 6.50% 

 Mortgages Mortgages 

 Nov'98 Oct'98 

 --------- --------- --------- --------

 Average Average Average Average 

 Price Yield 1/ Price Yield 1/ 

 ------- -------- ------- -------- 

Northeast * * * * 

Middle Atlantic * * $ 98.75 6.63% 

Southeast $100.00 7.00% $100.04 6.50% 

North Central $ 99.72 7.04% $100.08 6.49% 

Southwest $100.00 7.00% $100.00 6.50% 

West $ 98.97 7.14% $ 99.68 6.54% 

 

United States $ 99.47 7.07% $ 99.78 6.53% 

1/-Gross yield to investors, without allowance for 

 servicing costs based on prepayment of the mortgage 

 at the end of 12 years. 

 

* Dominant rate not quoted by respondents in region 

 

 United States 

 ----------- ---------- -----------

 Price Yield Mtg. Rate

 ---- $ ---- ---- % ---- ---- % ----

1984 High/Low 97.60/95.00 15.00/12.90 14.00/13.00

1985 High/Low 98.30/95.50 13.43/11.28 13.00/10.50

1986 High/Low 99.40/96.22 10.78/ 9.26 10.50/ 9.50

1987 High/Low 98.54/95.42 11.22/ 8.79 10.50/ 8.50

1988 High/Low 99.49/96.99 10.84/ 9.86 10.50/ 9.50

HUD Secondary Market Prices and Yields November 1998

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1989 High/Low 99.65/97.01 11.16/ 9.61 11.00/ 9.50

1990 High/Low 99.25/97.94 10.75/ 9.71 10.50/ 9.50

1991 High/Low 99.57/98.53 9.71/ 8.69 9.50/ 8.50

1992 High/Low 99.60/97.54 8.85/ 8.06 8.50/ 8.00

1993 High/Low 99.95/99.13 8.12/ 7.02 8.00/ 7.00

1994 High/Low 99.88/98.44 9.53/ 7.05 9.50/ 7.00 

1995 High/Low 99.97/99.18 9.54/ 7.51 9.50/ 7.50 

1996 High/Low 100.00/99.14 8.58/ 7.11 8.50/ 7.00 

1997 High/Low 99.91/99.20 8.56/ 7.51 8.50/ 7.50 

Data as of: November 1, 1998 HQE: 11-24-98

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Date Last Modified: 1/12/99

HUD Secondary Market Prices and Yields November 1998

http://www.hud.gov/fha/comp/rpts/sec/9811/2m9811t1.html (2 of 2) [11/1/1999 5:08:36 PM]
Secondary Market Report November 1998

TABLE 2

Most Frequently Quoted Contract Rates and Yields

for FHA Mortgages Sold in the Secondary Market

 

============================================================================================

 Contract Average Contract 

Average

 Year Rate Yield 1/ Year Rate Yield

1/

-------- -------- -------- --------- ------ 

--------

1993 Jan 8.00% 8.12% 1996 Jan 7.50% 7.52%

 Feb 8.00% 8.04% Feb 7.00% 7.11%

 Mar 7.50% 7.55% Mar 7.50% 7.57%

 Apr 7.50% 7.50% Apr 8.00% 8.09%

 May 7.50% 7.50% May 8.50% 8.52%

 Jun 7.50% 7.50% Jun 8.50% 8.57%

 Jul 7.50% 7.50% Jul 8.50% 8.55%

 Aug 7.50% 7.50% Aug 8.50% 8.56%

 Sep 7.00% 7.00% Sep 8.50% 8.58%

 Oct 7.00% 7.00% Oct 8.50% 8.56%

 Nov 7.00% 7.00% Nov 8.00% 8.00%

 Dec 7.50% 7.51% Dec 8.00% 8.14%

 

1994 Jan 7.50% 7.52% 1997 Jan 8.00% 8.06%

 Feb 7.00% 7.00% Feb 8.00% 8.06%

 Mar 7.50% 7.50% Mar 8.00% 8.08%

 Apr 8.50% 8.50% Apr 8.50% 8.55%

 May 8.50% 8.50% May 8.50% 8.56%

 Jun 8.50% 8.50% Jun 8.00% 8.05%

 Jul 9.00% 9.00% Jul 8.00% 8.02%

 Aug 8.50% 8.50% Aug 7.50% 7.61%

 Sep 2/ 8.50% 8.50% Sep 8.00% 8.02%

 Sep 2/ 9.00% 9.03% Oct 7.50% 7.52%

 Oct 9.00% 9.10% Nov 7.50% 7.53%

 Nov 9.00% 9.23% Dec 7.50% 7.51%

 Dec 9.50% 9.53% 

 

1995 Jan 9.50% 9.54% 1998 Jan 7.00% 7.17%

 Feb 9.00% 9.10% Feb 7.00% 7.08%

 Mar 9.00% 9.05% Mar 7.00% 7.06%

 Apr 8.50% 8.60% Apr 7.00% 7.09%

 May 8.50% 8.56% May 7.25% 7.37%

 Jun 8.00% 8.03% Jun 7.00% 7.07%

HUD Secondary Market Prices and Yields November

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 Jul 8.00% 8.00% Jul 7.00% 7.07%

 Aug 8.00% 8.09% Aug 7.00% 7.05%

 Sep 8.00% 8.03% Sep 7.00% 7.03%

 Oct 8.00% 8.03% Oct 6.50% 6.53%

 Nov 7.50% 7.61% Nov 7.00% 7.07%

 Dec 7.50% 7.51% 

1/-Gross yield to investors, without allowance for servicing costs 

 based on prepayment of the mortgage at the end of 12 years. 

2/-The September 1, 1994 survey found two rates reported with equal 

 frequency, evenly balanced between 8.50 and 9.00 percent. 

 Data as of: November 1, 1998 HQE: 

11-30-98

HSG/FHA Home Page | Reports Menu | Email Us Date Last Modified: 12/01/98

HUD Secondary Market Prices and Yields November

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Secondary Market Report November 1998

TABLE 3

Effective FHA Primary Rates

 

 

 "Dominant" Contract Rate 

 ------ ------ ------

 Nov'98 Oct'98 Nov'97

 

 United States 7.00% 6.50% 7.50%

 

 Average Points 

 ---------------------------- 

 Northeast 0.00 * 0.42 

 Middle Atlantic * 0.00 0.00 

 Southeast 0.17 0.08 0.04 

 North Central 0.33 0.00 0.00 

 Southwest 0.50 0.00 0.00 

 West 0.19 0.14 0.21 

 

 United States 0.30 0.06 0.11 

 

 Effective Rate 

 ---------------------------- 

 Northeast 7.00% * 7.56%

 Middle Atlantic * 6.50% 7.50%

 Southeast 7.02% 6.51% 7.51%

 North Central 7.04% 6.50% 7.50%

 Southwest 7.07% 6.50% 7.50%

 West 7.03% 6.52% 7.53%

 

 United States 7.04% 6.51% 7.51%

 

 

 Data as of: November 1, 1998 HQE: 11-30-98

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Date Last Modified: 12/01/98

HUD Secondary Market Prices and Yields November

http://www.hud.gov/fha/comp/rpts/sec/9811/2m9811t3.html [11/1/1999 5:08:37 PM]
Secondary Market Report November 1998

TABLE 4

FHA Primary Market Rates

 

 Nov 1, 1998 

 Percentage of 

 Field Offices Contract Average Effective

 Reporting Rate Points Rate

 ------------- -------- ------- ---------

Most Active Quote 40% 7.00% 0.30 7.04%

Second Most Popular Quote 15% 6.50% 0.39 6.55%

Third Most Popular Quote 13% 6.75% 0.33 6.79%

All Others 32% N/A N/A N/A

 

U.S. Average Rate 100% 6.90% 0.32 6.94%

 Oct 1, 1998 

 Percentage of 

 Field Offices Contract Average Effective

 Reporting Rate Points Rate

 ------------- -------- ------- ---------

Most Active Quote 49% 6.50% 0.06 6.51%

Second Most Popular Quote 16% 7.00% 0.06 7.01%

Third Most Popular Quote 15% 6.75% 0.38 6.80%

All Others 20% N/A N/A N/A

 

U.S. Average Rate 100% 6.67% 0.25 6.70%

 Sep 1, 1998 

HUD Secondary Market Prices and Yields November

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 Percentage of 

 Field Offices Contract Average Effective

 Reporting Rate Points Rate

 ------------- -------- ------- ---------

Most Active Quote 51% 7.00% 0.12 7.02%

Second Most Popular Quote 11% 7.50% 0.25 7.53%

Third Most Popular Quote 9% 6.75% 0.35 6.80%

All Others 29% N/A N/A N/A

 

U.S. Average Rate 100% 7.02% 0.22 7.05%

Data as of: November 1, 1998 HQE: 

11-30-98

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Date Last Modified: 12/01/98

HUD Secondary Market Prices and Yields November

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Secondary Market Report November 1998

TABLE 5

Average Interest Rates on Conventional First Mortgages

 New Home Loans Existing Home Loans 

 ------------------------ ------------------------

 Nov'98 Oct'98 Nov'97 Nov'98 Oct'98 Nov'97

 ------ ------ ------ ------ ------ ------

Northeast 6.83% 6.84% 7.75% 6.83% 6.84% 7.75%

Middle Atlantic 7.02% 6.83% 7.16% 7.02% 6.83% 7.16%

Southeast 6.80% 6.64% 7.43% 6.80% 6.65% 7.43%

North Central 6.89% 6.64% 7.60% 6.89% 6.67% 7.59%

Southwest 6.88% 6.55% 7.58% 6.82% 6.59% 7.60%

West 6.83% 6.57% 7.34% 6.83% 6.58% 7.36%

 

United States 6.86% 6.64% 7.48% 6.85% 6.65% 7.48%

 United States Average 

 ---------------------------------- 

 New Existing 

 Home Loans Home Loans 

 ----------- ---------- 

1984 High/Low 14.65/13.20 14.67/13.21 

1985 High/Low 13.26/11.56 13.28/11.58 

1986 High/Low 11.03/ 9.47 11.03/ 9.47 

1987 High/Low 10.84/ 9.04 10.87/ 9.04 

1988 High/Low 10.55/ 9.80 10.56/ 9.81 

1989 High/Low 10.93/ 9.70 10.95/ 9.69 

1990 High/Low 10.46/ 9.75 10.48/ 9.76 

1991 High/Low 9.66/ 8.67 9.65/ 8.66 

1992 High/Low 8.91/ 7.95 8.92/ 7.95 

1993 High/Low 8.19/ 6.89 8.19/ 6.89 

1994 High/Low 9.34/ 7.13 9.34/ 7.13 

1995 High/Low 9.32/ 7.46 9.33/ 7.46 

1996 High/Low 8.67/ 7.73 8.65/ 7.73 

HUD Secondary Market Prices and Yields November

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Data as of: November 1, 1998 HQE: 11-30-98

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Date Last Modified: 12/01/98

_

HUD Secondary Market Prices and Yields November

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Secondary Market Report November 1998

TABLE 6

Average Interest Rate for Home Construction Financing

 HUD/FHA * CONVENTIONAL 

 ------ ------ ------- ------ ------ 

------

 Nov'98 Oct'98 Nov'97 Nov'98 Oct'98 

Nov'97

 ------ ------ ------- ------ ------ 

------

Northeast 8.25% 8.08% 8.48% 8.58% 8.42% 

8.50%

Middle Atlantic 7.47% 7.32% 8.14% 7.24% 7.07% 

8.00%

Southeast 8.98% 8.38% 8.86% 8.90% 8.70% 

9.02%

North Central 7.99% 7.81% 8.19% 7.77% 7.84% 

8.17%

Southwest 7.83% 7.39% 9.27% 8.21% 7.24% 

8.90%

West 8.19% 8.30% 9.01% 8.73% 8.33% 

8.94%

 

United States 8.14% 7.92% 8.68% 8.32% 7.97% 

8.66%

 

* Type of financing planned for permanent loans. 

*******************************************************************************************

TABLE 7

National Percent of HUD Offices Reporting Adequate

Construction Funds Available for Homes

 

 Nov'98 Oct'98 Nov '97

 ---------------- ---------------- 

----------------

FHA-Insured 98% 92% 97%

HUD Secondary Market Prices and Yields November 1998

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Conventional 98% 96% 97%

 

 

These data are not based on actual transactions. They are 

compiled from the best information available to HUD Field

Offices throughout the US. 

Data as of: November 1, 1998 HQE: 11-30-98

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Date Last Modified: 12/01/98 

HUD Secondary Market Prices and Yields November 1998

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Secondary Market Report November 1998

TABLE 8

Trend of Builder's Plans Compared to Previous Month

by Housing Price Category

(Percent of Field Offices Reporting)

 Nov 1998 Nov 1997 

 -------------------- -------------------

 ------ Trend ------- ------ Trend ------ 

 Down Stable Up Down Stable Up

 ---- ------ --- ---- ------ ---

Low-Priced 4% 76% 20% 9% 79% 12%

Mod-Priced 2% 64% 33% 3% 71% 26%

High-priced 4% 60% 36% 5% 72% 23%

All 2% 75% 23% 3% 78% 19%

 Oct 1998 Oct 1997 

 -------------------- -------------------

 ------ Trend ------- ------ Trend ------ 

 Down Stable Up Down Stable Up

 ---- ------ --- ---- ------ ---

Low-Priced 17% 70% 13% 9% 82% 9%

Mod-Priced 4% 79% 17% 5% 69% 26%

High-priced 4% 74% 22% 7% 71% 22%

All 2% 81% 17% 4% 79% 17%

 

 Sep 1998 Sep 1997 

 -------------------- -------------------

 ------ Trend ------- ------ Trend ------ 

 Down Stable Up Down Stable Up

 ---- ------ --- ---- ------ ---

Low-Priced 15% 75% 10% 7% 79% 14%

Mod-Priced 2% 75% 23% 3% 74% 23%

High-priced 2% 71% 27% 3% 76% 21%

All 0% 81% 19% 0% 83% 17%

 

HUD Secondary Market Prices and Yields November 1998

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PERCENTAGE POINT DIFFERENCE 

 SEP 1998 - NOV 1998 SEP 1997 - NOV 1997 

 -------------------- --------------------

 ------ Trend ------- ------ Trend ------- 

 Down Stable Up Down Stable Up

 ---- ------ --- ---- ------ --- 

Low-Priced -11% 1% 10% 2% 0% -2%

Mod-Priced 0% -11% 11% 0% -3% 3%

High-priced 2% -11% 9% 2% -4% 2%

All 2% - 6% 4% 3% -5% 2%

Data as of: November 1, 1998 HQE: 11-30-98

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HUD Secondary Market Prices and Yields November 1998

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Secondary Market Report November 1998

TABLE 9

Unsold Inventory of New Homes Compared

to Previous Month

(Percent of Field Offices Reporting)

 Nov'98 Nov'97

 ------ ------

 Declining 14% 13%

 Stationary 75% 78%

 Advancing 11% 9%

 

 Total 100% 100%

 Oct'98 Oct'97

 ------ ------

 Declining 17% 14%

 Stationary 74% 79%

 Advancing 9% 7%

 

 Total 100% 100%

 Sep'98 Sep'97

 ------ ------

 Declining 23% 14%

 Stationary 73% 83%

 Advancing 4% 3%

 

 Total 100% 100%

 

 Percentage Point Difference 

 

 Sep'98- Sep'97-

 Nov'98 Nov'97

 ------- -------

 Declining -9% -1%

 Stationary 2% -5%

HUD Secondary Market Prices and Yields November 1998

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 Advancing 7% 6%

 

Data as of: November 1, 1998 HQE: 11-30-98

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HUD Secondary Market Prices and Yields November 1998

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