Interest Rates Fall in March

According to the Federal Housing Finance Administration on Thursday, interest rates on conventional purchase-money mortgages decreased nationally from February to March. The FHFA Index showed that the average interest rate on all mortgage loans decreased 13 basis points to 1.12 percent in March, from 4.25 in February.

The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.12 percent for loans closed in late March, down 15 basis points from 4.27 percent in February.

The average interest rate on conventional, 30-year fixed-rate mortgages fell 17 basis points in March to 4.24 percent, below February’s 4.41 percent.

The average loan amount for all types of loans was $392,700 in March, up from $301,600 in February by $11,100.

March is the first month in several months to see a decline in mortgage rates. January and February both saw an increase in rates nationally, though application rates are on the rise. The Mortgage Bankers Association’s Builder Applications Survey has shown applications rising throughout March and into April.

According to the Survey, year-over-year new home purchases for March 2017 increased 6.7 percent compared to March 2016. Month-over-month, applications grew 23 percent. Average loan size decreased in March, from $330,208 in February to $328,192.

The largest percentage of loan applications were conventional loans. 67.5 percent of loan applications were for conventional loans, while RHS/USDA loans composed 1.0 percent and VA loans composed 12.8 percent.

As interest rates dropped, prices have been on the rise, as shown in the FHFA’s last House Price Index for February, which released on Tuesday. House prices rose an average of 6.4 percent that month year-over -year, and up 0.6 percent month-over-month. These are the highest prices in several months.

Read the FHFA's Index report here.