March 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 - March 1999

http://www.hud.gov/fha/comp/rpts/sec/sec99mar.html [11/1/1999 5:32:19 PM]
NEWS

Department of Housing and Urban Development – Andrew Cuomo, Secretary

Office of Public Affairs, Washington, DC 20410

HUD No. 99-54 FOR RELEASE

(202) 708-0685 Monday

http://www.hud.gov/news.html March 22, 1999

 

HUD RELEASES MARCH 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 March 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 7.10 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 8 basis points in the West region to a decrease

of 2 basis points in the Southeast.

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

quotes was 7.26 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 50

basis points in the Northeast region, 6 basis points in the North Central, 63 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 up 22 basis points to 7.02 percent in new home loans and up 22 basis

points to 7.04 percent for existing home loans.

The proportion of HUD offices reporting an adequate supply of construction funds on March 1 was 100

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 March 1 was 67 percent for low-priced homes, 60 percent for moderate-priced homes, and 63 percent for

high-priced homes.

On March 1 the proportion of HUD Field Offices reporting a stable trend in builders' unsold inventory

of new homes was 73 percent, while 24 percent noted a declining trend and 3 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 74 percent, a declining trend 21 percent, and an advancing trend 5 percent.

##

Date of next release: April 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

Mar'99 Apr'99

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

Average Average Average Average

Price Yield 1/ Price Yield 1/

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

Northeast * * * *

Middle Atlantic * * $ 98.75 7.17%

Southeast $ 99.71 7.04% $ 99.55 7.06%

North Central $ 99.34 7.09% $ 99.66 7.05%

Southwest $ 100.00 7.00% ** **

West $ 99.05 7.13% $ 99.62 7.05%

United States $ 99.25 7.10% $ 99.40 7.08%

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: Mar 1, 1999 HQE: 3/17/1999
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% Mar 7.00% 7.10%

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: Mar 1, 1999 HQE: 3/17/1999
TABLE 3

Effective FHA Primary Rates

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

 "Dominant" Contract Rate

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

 Mar'99 Feb'99 Mar'98

United States 7.00% 7.00% 7.50%

Average Points 

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

Northeast 0.50 0.00 0.00

Middle Atlantic 0.00 0.00 0.17

Southeast 0.00 0.00 0.00

North Central 0.06 0.67 0.00

Southwest 0.00 0.00 0.00

West 0.63 0.33 0.14

United States 0.21 0.21 0.08

Effective Rate

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

Northeast 7.07% 7.00% 7.50%

Middle Atlantic 7.00% 7.00% 7.52%

Southeast 7.00% 7.00% 7.50%

North Central 7.01% 7.09% 7.50%

Southwest 7.00% 7.00% 7.50%

West 7.08% 7.04% 7.52%

United States 7.03% 7.03% 7.51%

Data as of: Mar 1, 1999 HQE: 3/17/1999
TABLE 4

FHA Primary Market Rates

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

Mar 1, 1999

Percentage of 

Field Offices Contract Average Effective

Reporting Rate Points Rate

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

Most Active Quote 28% 7.00% 0.21 7.03%

Second Most Popular Quote 21% 7.25% 0.29 7.29%

Third Most Popular Quote 16% 7.50% 0.20 7.53%

All Others 35% N/A N/A N/A

U.S. Average Rate 100% 7.22% 0.32 7.26%

Feb 1, 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%

Data as of: Mar 1, 1999 HQE: 3/17/1999
TABLE 5

Average Interest Rates on Conventional First Mortgages

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

 New Home Loans Existing Home Loans

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

Mar'99 Feb'99 Mar'98 Mar'99 Feb'99 Mar'98

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

Northeast 7.04% 6.90% 7.22% 7.04% 6.90% 7.20%

Middle Atlantic 6.98% 6.79% 7.19% 6.98% 6.79% 7.19%

Southeast 6.93% 6.75% 7.16% 6.93% 6.75% 7.16%

North Central 7.13% 6.88% 7.21% 7.13% 6.85% 7.21%

Southwest 7.08% 6.79% 7.35% 7.13% 6.79% 7.35%

West 6.98% 6.77% 7.18% 7.02% 6.85% 7.18%

United States 7.02% 6.80% 7.22% 7.04% 6.82% 7.22%

 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:Mar 1, 1999 HQE: 3/17/1999
TABLE 6

 Average Interest Rate for Home Construction Financing

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

 HUD/FHA * CONVENTIONAL

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

Mar'99 Feb'99 Mar'98 Mar'99 Feb'99 Mar'98

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

Northeast 7.80% 8.00% 7.95% 7.78% 8.00% 7.95%

Middle Atlantic 8.38% 8.00% 7.58% 8.48% 8.05% 7.42%

Southeast 8.06% 7.88% 8.81% 7.97% 7.99% 8.95%

North Central 8.15% 7.93% 7.84% 7.78% 7.89% 7.92%

Southwest 9.05% 7.71% 8.55% 9.17% 7.90% 8.33%

West 8.64% 8.53% 8.64% 8.44% 8.50% 8.63%

United States 8.45% 8.08% 8.28% 8.47% 8.08% 8.32%

* Type of financing planned for permanent loans.

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

TABLE 7

 National Percent of HUD Offices Reporting Adequate

 Construction Funds Available for Homes

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

Mar'99 Feb'99 Mar'98

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

FHA-Insured 100% 96% 98%

Conventional 98% 98% 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: Mar 1, 1999 HQE: 3/17/1999
TABLE 8

Trend of Builder's Plans Compared to Previous Month

by Housing Price Category

(Percent of Field Offices Reporting)

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

Mar 1999 Mar 1998

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

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

Down Stable Up Down Stable Up

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

Low-Priced 12% 67% 21% 12% 78% 10%

Mod-Priced 4% 60% 36% 2% 72% 26%

High-priced 5% 63% 32% 3% 71% 26%

All 2% 70% 28% 0% 81% 19%

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%

PERCENTAGE POINT DIFFERENCE

Jan 1999 - Mar 1999 Jan 1998 - Mar 1998

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

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

Down Stable Up Down Stable Up

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

Low-Priced 4% -8% 4% 4% -1% -3%

Mod-Priced 4% -11% 7% -1% 0% 1%

High-priced -1% -4% 5% -2% -1% 3%

All -4% 0% 4% -3% 2% 1%

 Data as of: Mar 1, 1999 HQE: 3/17/1999
TABLE 9

Unsold Inventory of New Homes Compared

to Previous Month

(Percent of Field Offices Reporting)

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

Mar'99 Mar'98

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

Declining 24% 21%

Stationary 73% 74%

Advancing 3% 5%

Total 100% 100%

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%

 Percentage Point Difference

Jan'99 Jan'98

Mar'99 Mar'98

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

Declining 8% 5%

Stationary -11% -6%

Advancing 3% 1%

Data as of: Mar 1, 1999 HQE: 3/17/1999