February 1999

Secondary Market Prices & Yields

and Interest Rates for Home Loans

● Secondary Market Prices/Yields/Interest Rates Press Release

● Secondary Market Prices/Yields Tables 1-9

● Last revised: July 26, 1999

HUD Secondary Market Prices & Yields - February 1999

http://www.hud.gov/fha/comp/rpts/sec/sec99feb.html [11/1/1999 5:26:51 PM]
NEWS

Department of Housing and Urban Development – Andrew Cuomo, Secretary

Office of Public Affairs, Washington, DC 20410

HUD RELEASES FEBRUARY SURVEY OF SECONDARY MARKET PRICES

AND YIELDS AND INTEREST RATES FOR HOME LOANS

News Release

HUD No. 99-49 FOR RELEASE

L. Richard Keyser (202)708-7500 x137 March 9, 1999

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

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 February 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 7.00 percent. 

Typical prices for 7.00 percent contract interest rate loans produced a national average secondary market

yield of 7.08 percent.

FHA secondary market yields were mixed. Changes in secondary market yields on the most

frequently quoted Section 203(b) contract rate ranged from an increase of 2 basis points in the Southeast

and North Central regions to a decrease of 2 basis points in the West.

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

market quotes was 6.93 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 21

basis points and an effective interest rate of 7.03 percent. Average basis points for the 7.00 percent

primary rate were 67 basis points in the North Central region, 33 basis points in the West and zero basis

points in the other regions.

The national average contract rates for commitments on conventional loans for new and existing

homes in the primary mortgage market went down 3 basis points to 6.80 percent in new home loans, and

stayed at 6.82 percent (the same as in January) for existing home loans.

The proportion of HUD offices reporting an adequate supply of construction funds on February 1

was 96 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 February 1 was 71 percent for low-priced homes, 65 percent for moderatepriced homes, and 69 percent for high-priced homes.
On February 1 the proportion of HUD Field Offices reporting a stable trend in builders' unsold

inventory of new homes was 70 percent, while 24 percent noted a declining trend and 6 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 80 percent, a declining trend 15 percent, and an

advancing trend 5 percent.

##

Date of next release: March 22, 1999 

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

http://www.hud.gov/fha/comp/rpts/fharpts.html.
 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% 7.00%

Mortgages Mortgages

Feb'99 Jan'99

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

Average Average Average Average

Price Yield 1/ Price Yield 1/

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

Northeast * * $ 99.00 7.13%

Middle Atlantic $98.75 7.17% * *

Southeast $ 99.55 7.06% $ 99.72 7.04%

North Central $ 99.66 7.05% $ 99.75 7.03%

Southwest ** ** $ 100.00 7.00%

West $ 99.62 7.05% $ 99.47 7.07%

United States $ 99.40 7.08% $ 99.55 7.06%

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

** Insufficient Information

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

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

1998 High/Low 99.83/98.25 7.17/ 6.53 7.25/ 6.50

Data as of: Feb1, 1999 HQE: 3/1/1999
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/

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

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%

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% Dec 7.00% 7.02%

 1996 Jan 7.50% 7.52% 1999 Jan 7.00% 7.06%

Feb 7.00% 7.11% Feb 7.00% 7.08%

Mar 7.50% 7.57%

Apr 8.00% 8.09%

May 8.50% 8.52%

Jun 8.50% 8.57%

Jul 8.50% 8.55%

Aug 8.50% 8.56%

Sep 8.50% 8.58%

Oct 8.50% 8.56%

Nov 8.00% 8.00%

Dec 8.00% 8.14%

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: Feb1, 1999 HQE: 3/1/1999
TABLE 3

Effective FHA Primary Rates

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

 "Dominant" Contract Rate

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

 Feb'99 Jan'99 Feb'98

United States 7.00% 7.00% 7.00%

Average Points 

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

Northeast 0.00 0.00 2.00

Middle Atlantic 0.00 0.00 2.75

Southeast 0.00 0.00 0.23

North Central 0.67 0.44 0.25

Southwest 0.00 0.08 0.00

West 0.33 0.22 0.39

United States 0.21 0.14 0.40

Effective Rate

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

Northeast 7.00% 7.00% 7.27%

Middle Atlantic 7.00% 7.00% 7.37%

Southeast 7.00% 7.00% 7.03%

North Central 7.09% 7.06% 7.03%

Southwest 7.00% 7.01% 7.00%

West 7.04% 7.03% 7.05%

United States 7.03% 7.02% 7.05%

Data as of: Feb1, 1999 HQE: 3/1/1999
TABLE 4

FHA Primary Market Rates

Feb1, 1999

Percentage of 

Field Offices Contract Average Effective

Reporting Rate Points Rate

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

Most Active Quote 42% 7.00% 0.21 7.03%

Second Most Popular Quote 16% 6.75% 0.33 6.79%

Third Most Popular Quote 12% 6.88% 0.00 6.88%

All Others 30% N/A N/A N/A

U.S. Average Rate 100% 6.89% 0.27 6.93%

Jan 1, 1999

Percentage of 

Field Offices Contract Average Effective

Reporting Rate Points Rate

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

Most Active Quote 46% 7.00% 0.14 7.02%

Second Most Popular Quote 18% 6.75% 0.80 6.86%

Third Most Popular Quote 14% 6.88% 0.09 6.89%

All Others 22% N/A N/A N/A

U.S. Average Rate 100% 6.91% 0.33 6.95%

Dec 1, 1998

Percentage of 

Field Offices Contract Average Effective

Reporting Rate Points Rate

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

Most Active Quote 39% 7.00% 0.02 7.00%

Second Most Popular Quote 16% 6.75% 0.50 6.82%

Third Most Popular Quote 13% 6.50% 0.11 6.51%

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

U.S. Average Rate 100% 6.86% 0.31 6.90%

Data as of: Feb1, 1999 HQE: 3/1/1999
TABLE 5

Average Interest Rates on Conventional First Mortgages

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

 New Home Loans Existing Home Loans

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

Feb'99 Jan'99 Feb'98 Feb'99 Jan'99 Feb'98

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

Northeast 6.90% 6.66% 7.55% 6.90% 6.66% 7.55%

Middle Atlantic 6.79% 6.96% 7.17% 6.79% 6.96% 7.17%

Southeast 6.75% 6.78% 7.06% 6.75% 6.78% 7.08%

North Central 6.88% 6.84% 7.16% 6.85% 6.84% 7.18%

Southwest 6.79% 6.86% 7.18% 6.79% 6.87% 7.18%

West 6.77% 6.81% 7.05% 6.85% 6.79% 7.08%

United States 6.80% 6.83% 7.16% 6.82% 6.82% 7.17%

 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

1997 High/Low 8.25/ 7.38 8.25/ 7.39

1998 High/Low 7.25/ 6.64 7.23/ 6.65

Data as of:Feb1, 1999 HQE: 3/1/1999
TABLE 6

 Average Interest Rate for Home Construction Financing

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

 HUD/FHA * CONVENTIONAL

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

Feb'99 Jan'99 Feb'98 Feb'99 Jan'99 Feb'98

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

Northeast 8.00% 7.21% 8.30% 8.00% 7.33% 8.40%

Middle Atlantic 8.00% 7.85% 7.50% 8.05% 8.04% 7.78%

Southeast 7.88% 8.41% 8.80% 7.99% 8.08% 8.98%

North Central 7.93% 7.97% 7.79% 7.89% 7.88% 7.81%

Southwest 7.71% 7.60% 9.00% 7.90% 7.91% 8.59%

West 8.53% 8.40% 8.74% 8.50% 8.55% 8.49%

United States 8.08% 8.05% 8.40% 8.08% 8.07% 8.40%

* Type of financing planned for permanent loans.

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

TABLE 7

 National Percent of HUD Offices Reporting Adequate

 Construction Funds Available for Homes

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

Feb'99 Jan'99 Feb'98

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

FHA-Insured 96% 100% 98%

Conventional 98% 100% 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: Feb1, 1999 HQE: 3/1/1999
TABLE 8

Trend of Builder's Plans Compared to Previous Month

by Housing Price Category

(Percent of Field Offices Reporting)

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

Feb 1999 Feb 1998

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

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

Down Stable Up Down Stable Up

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

Low-Priced 14% 71% 15% 9% 75% 16%

Mod-Priced 2% 65% 33% 2% 73% 25%

High-priced 6% 69% 25% 4% 75% 21%

All 4% 73% 23% 0% 80% 20%

- - -

Jan 1999 Jan 1998

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

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

Down Stable Up Down Stable Up

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

Low-Priced 8% 75% 17% 8% 79% 13%

Mod-Priced 0% 71% 29% 3% 72% 25%

High-priced 6% 67% 27% 5% 72% 23%

All 6% 70% 24% 3% 79% 18%

- - -

Dec 1998 Dec 1997

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

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

Down Stable Down Down Stable Up

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

Low-Priced 13% 76% 11% 8% 78% 14%

Mod-Priced 4% 67% 29% 3% 72% 25%

High-priced 9% 61% 30% 7% 72% 21%

All 6% 74% 20% 3% 77% 20%

PERCENTAGE POINT DIFFERENCE

Dec 1998 - Feb 1999 Dec 1997 - Feb 1998

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

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

Down Stable Up Down Stable Up

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

Low-Priced 1% -5% 4% 1% -3% 2%

Mod-Priced -2% -2% 4% -1% 1% 0%

High-priced -3% 8% -5% -3% 3% 0%

All -2% -1% 3% -3% 3% 0%

 Data as of: Feb1, 1999 HQE: 3/1/1999
TABLE 9

Unsold Inventory of New Homes Compared

to Previous Month

(Percent of Field Offices Reporting)

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

Feb'99 Feb'98

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

Declining 24% 15%

Stationary 70% 80%

Advancing 6% 5%

Total 100% 100%

Jan'99 Jan'98

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

Declining 16% 16%

Stationary 84% 80%

Advancing 0% 4%

Total 100% 100%

 Dec'98 Dec'97

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

Declining 16% 12%

Stationary 74% 81%

Advancing 10% 7%

Total 100% 100%

 Percentage Point Difference

Dec'98 Dec'97-

Feb'99 Feb'98

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

Declining 8% 3%

Stationary -4% -1%

Advancing -4% -2%

Data as of:Feb1, 1999 HQE: 3/1/1999