September 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 - September 1998

http://www.hud.gov/fha/comp/rpts/sec/sec98sep.html [11/1/1999 2:08:43 PM]
Secondary Market Report September 1998

Secondary Market Prices and Yields

and Interest Rates for Home Loans

September 1, 1998

News Release

HUD No. 98-469 FOR RELEASE:

L. Richard Keyser (202) 755-7500 x137 September 25, 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 September 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 7.03 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 Northeast region to a decrease of 6 basis points in the

Southeast.

In the FHA primary mortgage market, the average FHA effective rate for all reported primary market quotes was 7.05

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 12 basis points and an effective interest rate of 7.02 percent.

Average basis points for the 7.00 percent primary rate were 100 basis points in the Northeast, zero basis points in the

Middle Atlantic, zero basis points in the Southeast, 8 basis points in the North Central, zero basis points in the Southwest,

and 13 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 down 19 basis points to 6.86 percent in new home loans, and down 14 basis points to 6.92 percent in

existing home loans.

 The proportion of HUD offices reporting an adequate supply of construction funds on September 1, was 94 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 September 1 was 75 percent for low-priced homes, 75 percent for

moderate-priced homes, and 71 percent for high-priced homes.

 On September 1, the proportion of HUD Field Offices reporting a stable trend in builders' unsold inventory of new homes

was 73 percent, while 23 percent noted a declining trend and 4 percent an advancing situation.

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809pr.html (1 of 2) [11/1/1999 2:08:58 PM]
 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 83 percent, a

declining trend 14 percent, and an advancing trend 3 percent.

# # # #

Date of next release: October 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: 10/05/98

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809pr.html (2 of 2) [11/1/1999 2:08:58 PM]
WHAT'S NEW IN MULTIFAMILY?

The whole perspective has changed! If you do business with

HUD on Multifamily Projects and live in the Fort Worth or

Miami areas, plan to attend the "Multifamily Housing -- New

Perspectives Conference", Friday, November 5 or

Wednesday, December 8, respectively. Get your agenda

and register HERE!

PROCESSING MF LOANS FASTER! NEW LINK!

HUD is preparing an accelerated processing system for

certain HUD multifamily loan insurance programs. The

program is called the Multifamily Accelerated Processing

(MAP). Current plans call for it to be operational by May,

2000. Be sure to see the MAP Forums "Key Issues Paper"

and the Notes from MAP Forums (new!)

National Partners in Homeownership

Housing on the Move!! - October 25,1999

Neighborhood Networks

Office of Housing Home Page

http://www.hud.gov/fha/fhahome.html [11/1/1999 2:10:44 PM]
Mortgage Lending Activity

Secondary Market Reports

Housing Commisioner's Reports

Survivorship/Decrement Tables

HMDA Reporting, Getting IT Right!

Got an FHA Reports Question?

Crosscutting Housing

Reports

● 1997 Housing/FHA Report

● 1996 Housing/FHA Report

● 1995 Housing/FHA Report

● 1994 Housing/FHA Report

● 1994 FHA Annual Management Report

● 1997 Housing/FHA Management Plan

● Insured Multifamily Mortgages

Independent Audit and FHA's Financial

Health

● 

Last revised: September 22, 1998

HUD FHA Audit Housing Management and Annual Reports

http://www.hud.gov/fha/comp/rpts/fharpts.html [11/1/1999 2:11:02 PM]
privacy notice

We believe in protecting your privacy. When you send us e-mail, we won't share your

e-mail address with anyone outside HUD. We'll only use it to respond to your requests.

You will be automatically forwarded to a mail message.

Once you have sent your message, click "Back" to return to the previous page.

Privacy Notice 

http://www.hud.gov/cgi-bin/maildisclaim?l._richard_keyser@hud.gov [11/1/1999 2:12:07 PM]
Secondary Market Report September 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% 7.00% 

 Mortgages Mortgages 

 Sep'98 Aug'98 

 

 Average Average Average Average 

 Price Yield 1/ Price Yield 1/ 

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

Northeast $ 99.82 7.02% $100.00 7.00% 

Middle Atlantic 99.20 7.11% * * 

Southeast 100.05 6.99% 99.63 7.05% 

North Central 99.99 7.00% 99.75 7.03% 

Southwest 100.00 7.00% 99.98 7.00% 

West 99.52 7.06% 99.26 7.10% 

 

United States $99.75 7.03% $99.63 7.05% 

 

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 

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

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t1.html (1 of 2) [11/1/1999 2:12:12 PM]
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: September 1, 1998 HQE: 09-25-98

HSG/FHA Home Page | Reports Menu | Email Us

Date Last Modified: 10/05/98

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t1.html (2 of 2) [11/1/1999 2:12:12 PM]
Secondary Market Report September 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% 7.57% Apr 8.00% 8.09% 

 May 7.50% 7.56% May 8.50% 8.52% 

 Jun 7.50% 7.59% Jun 8.50% 8.57% 

 Jul 7.50% 7.52% Jul 8.50% 8.55% 

 Aug 7.50% 7.51% Aug 8.50% 8.56% 

 Sep 7.00% 7.02% Sep 8.50% 8.58% 

 Oct 7.00% 7.03% Oct 8.50% 8.56% 

 Nov 7.00% 7.08% 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% 7.05% Feb 8.00% 8.06% 

 Mar 7.50% 7.59% Mar 8.00% 8.08% 

 Apr 8.50% 8.57% Apr 8.50% 8.55% 

 May 8.50% 8.63% May 8.50% 8.56% 

 Jun 8.50% 8.63% Jun 8.00% 8.05% 

 Jul 9.00% 9.03% Jul 8.00% 8.02% 

 Aug 8.50% 8.65% Aug 7.50% 7.61% 

 Sep 2/ 8.50% 8.66% 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% 

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t2.html (1 of 2) [11/1/1999 2:12:15 PM]
 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% 7.61% 

 Dec 7.50% 

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: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us Date Last Modified: 10/05/98

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t2.html (2 of 2) [11/1/1999 2:12:15 PM]
Secondary Market Report September 1998

TABLE 3

Effective FHA Primary Rates

 

 "Dominant" Contract Rate 

 

 Sep'98 Aug'98 Sep'97 

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

United States 7.00% 7.00% 8.00% 

 

 Average Points 

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

Northeast 1.00 2.00 0.50 

Middle Atlantic 0.00 1.00 0.06 

Southeast 0.00 0.20 0.00 

North Central 0.08 0.19 0.20 

Southwest 0.00 0.00 0.00 

West 0.13 0.00 0.00 

 

United States 0.12 0.24 0.09 

 Effective Rate 

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

Northeast 7.09% 7.27% 8.07% 

Middle Atlantic 7.00% 7.13% 8.01% 

Southeast 7.00% 7.03% 8.00% 

North Central 7.01% 7.03% 8.03% 

Southwest 7.00% 7.00% 8.00% 

West 7.02% 7.00% 8.00% 

 

United States 7.02% 7.03% 8.01% 

 

 Data as of: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us

Date Last Modified: 10/05/98

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t3.html [11/1/1999 2:12:19 PM]
Secondary Market Report September 1998

TABLE 4

FHA Primary Market Rates

 

 Sep 1, 1998 

 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% 

 

 Aug 1, 1998 

 Percentage of 

 Field Offices Contract Average Effective

 Reporting Rate Points Rate

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

Most Active Quote 38% 7.00% 0.24 7.03%

Second Most Popular Quote 23% 7.25% 0.04 7.23%

Third Most Popular Quote 17% 7.50% 0.17 7.52%

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

 

U.S. Average Rate 100% 7.18% 0.28 7.22%

 Jul 1, 1998 

 Percentage of 

 Field Offices Contract Average Effective

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t4.html (1 of 2) [11/1/1999 2:12:21 PM]
 Reporting Rate Points Rate

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

Most Active Quote 42% 7.00% 0.47 7.06%

Second Most Popular Quote 33% 7.25% 0.00 7.25%

Third Most Popular Quote 10% 7.50% 0.30 7.54%

All Others 15% N/A N/A N/A

 

U.S. Average Rate 100% 7.18% 0.34 7.23%

Data as of: September 1, 1998 HQE: 

9-25-98

HSG/FHA Home Page | Reports Menu | Email Us

Date Last Modified: 10/05/98

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t4.html (2 of 2) [11/1/1999 2:12:21 PM]
Secondary Market Report September 1998

TABLE 5

Average Interest Rates on Conventional First Mortgages

 New Home Loans Existing Home Loans 

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

 Sep'98 Aug'98 Jul'97 Sep'98 Aug'98 Jul'97

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

Northeast 6.89% 7.12% 7.65% 6.89% 7.12% 7.65%

Middle Atlantic 7.00% 7.16% 7.48% 7.00% 7.16% 7.48%

Southeast 6.88% 7.03% 7.68% 6.88% 7.03% 7.68%

North Central 6.91% 7.09% 7.77% 6.94% 7.09% 7.79%

Southwest 6.71% 7.10% 7.69% 6.94% 7.15% 7.69%

West 6.92% 6.91% 7.65% 6.90% 6.90% 7.58%

 

United States 6.86% 7.05% 7.67% 6.92% 7.06% 7.66%

 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

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t5.html (1 of 2) [11/1/1999 2:12:28 PM]
Data as of: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us

Date Last Modified: 09/25/98

_

HUD Secondary Market Prices and Yields September

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t5.html (2 of 2) [11/1/1999 2:12:28 PM]
Secondary Market Report September 1998

TABLE 6

Average Interest Rate for Home Construction Financing

 HUD/FHA * CONVENTIONAL 

 

 Sep'98 Aug'98 Sep '97 Sep'98 Aug'98 Sep '97

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

Northeast 7.82% 7.89% 8.20% 7.67% 8.09% 8.35%

Middle Atlantic 7.58% 7.70% 7.73% 7.25% 7.30% 8.30%

Southeast 8.26% 8.55% 8.82% 8.36% 8.59% 9.05%

North Central 7.92% 8.01% 8.29% 8.01% 7.95% 8.22%

Southwest 7.98% 8.46% 9.00% 7.95% 8.28% 8.78%

West 8.44% 8.68% 8.88% 8.40% 9.03% 8.82%

 

United States 8.04% 8.27% 8.55% 8.07% 8.31% 8.63%

* Type of financing planned for permanent loans. 

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

TABLE 7

National Percent of HUD Offices Reporting Adequate Construction Funds Available for

Homes

 

 Aug'98 Jul'98 Aug'97

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

FHA-Insured 94% 92% 100%

Conventional 98% 94% 100%

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: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t6.html (1 of 2) [11/1/1999 2:12:33 PM]
Date Last Modified: 09/25/98 

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t6.html (2 of 2) [11/1/1999 2:12:33 PM]
Secondary Market Report September 1998

TABLE 8

Trend of Builder's Plans Compared to Previous Month

by Housing Price Category

(Percent of Field Offices Reporting)

 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%

 

 Aug 1998 Aug 1997 

 

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

 Down Stable Up Down Stable Up

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

Low-Priced 17% 75% 8% 7% 80% 13%

Mod-Priced 2% 85% 13% 2% 76% 22%

High-priced 2% 79% 19% 3% 75% 22%

All 0% 87% 13% 0% 85% 15%

 

 Jul 1998 Jul 1997 

 

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

 Down Stable Up Down Stable Up

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

Low-Priced 9% 78% 13% 6% 79% 15%

Mod-Priced 22% 76% 2% 2% 82% 16%

High-priced 26% 70% 4% 5% 77% 18%

All 19% 79% 2% 0% 87% 13%

 

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t8.html (1 of 2) [11/1/1999 2:12:34 PM]
 

 PERCENTAGE POINT DIFFERENCE 

 Jul 1998 - Sep 1998 Jul 1997 - Sep 1997 

 

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

 Down Stable Up Down Stable Up

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

Low-Priced 6% -3% -3% 1% 0% -1%

Mod-Priced -20% -1% 21% 1% -8% 7%

High-priced -24% 1% 23% -2% -1% 3%

All -19% 2% 17% 0% -4% 4%

Data as of: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us Date Last Modified: 09/25/98

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t8.html (2 of 2) [11/1/1999 2:12:34 PM]
Secondary Market Report September 1998

TABLE 9

Unsold Inventory of New Homes Compared

to Previous Month

(Percent of Field Offices Reporting)

 Sep'98 Sep'97

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

Declining 23% 14%

Stationary 73% 83%

Advancing 4% 3%

 

Total 100% 100%

 Aug'98 Aug'97

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

Declining 20% 8%

Stationary 74% 90%

Advancing 6% 2%

 

Total 100% 100%

 Jul'98 Jul'97

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

Declining 20% 12%

Stationary 80% 83%

Advancing 0% 5%

 

Total 100% 100%

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t9.html (1 of 2) [11/1/1999 2:12:36 PM]
 Percentage Point Difference 

 

 Jul'98- Jul'97-

 Sep'98 Sep'97

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

Declining 3% 2%

Stationary -7% 0%

Advancing 4% -2%

Data as of: September 1, 1998 HQE: 9-25-98

HSG/FHA Home Page | Reports Menu | Email Us Date Last Modified: 09/25/98

HUD Secondary Market Prices and Yields September 1998

http://www.hud.gov/fha/comp/rpts/sec/9809/2m9809t9.html (2 of 2) [11/1/1999 2:12:36 PM]