NEWS

Department of Housing and Urban Development – Andrew Cuomo, Secretary

Office of Public Affairs, Washington, DC 20410

HUD No. 99- 253 FOR RELEASE

L. Richard Keyser (202) 755-7500 x137 Wednesday

Email Address: L._Richard_Keyser@hud.gov November 24, 1999

 

HUD RELEASES NOVEMBER SURVEY OF SECONDARY MARKET PRICES

AND YIELDS AND INTEREST RATES FOR HOME LOANS

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

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, 1999, 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 8.00 percent. Typical prices for 8.00 percent contract interest rate

loans produced a national average secondary market yield of 8.02 percent.

FHA secondary market yields decreased slightly. Secondary market yields on the most frequently

quoted Section 203(b) contract rate went down 3 basis points for the U.S. average.

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

market quotes was 8.05 percent. Lenders reported that the most frequent rate being quoted to potential

FHA homebuyers for 60 days or more "lock-in" commitments was 8.00 percent with an average of 

42 basis points and an effective interest rate of 8.06 percent. Average basis points for the 8.00 percent

primary rate were 100 basis points in the Southwest, Southeast and Northeast regions, 40 basis points in

the West, and 0 basis points in the Middle Atlantic and North Central regions.

The national average contract rates for commitments on conventional loans for new home loans in

the primary mortgage market went up only 1 basis point from 7.76 percent in October to

7.77 percent for November. Existing home loans remained the same at 7.80 percent.

The proportion of HUD offices reporting an adequate supply of construction funds on November

1 was 100 percent for FHA and 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 71 percent for low-priced homes, 76 percent for moderate-priced homes,

and 81 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 12 percent noted a declining trend and 13 percent reported

an advancing situation. An advancing trend is indicative of a growing inventory of homes, meaning either
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over-production and/or slower new home sales. Conversely, a declining inventory of new homes indicates

demand would be relatively stronger than supply. One year ago the proportion of offices reporting a

stationary trend was 75 percent, a declining trend of 14 percent, and 11 percent reported an advancing

trend.

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Date of next release: January 4, 2000 

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

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