Home Mortgage Rates Rose In July, Federal Regulator Reports

Home buyers paid higher interest rates on conventional home mortgage loans in July than in June, the Federal Housing Finance Agency reported Thursday.

The average interest rate on conventional 30-year fixed-rate mortgages increased 19 basis points to 5.31%, while average rates for 15-year fixed-rate loans rose nine basis points, to 4.89%, according to the FHFA. Conventional mortgages cover loans up to $417,000. The FHFA said the average loan-to-price ratio for July rose to 74.9%, from 74.4% in June, while the average loan amount fell by $5,700, to $227,300.

Results for July reflect loans that closed between July 27 and July 31; since interest rates typically are set 30 to 45 days before closing, the reported rates reflect market conditions prevailing in mid- to late June.

The FHFA, which oversees federal mortgage-finance firms Fannie Mae (FNM) and Freddie Mac (FRE), said the report didn't include any data on adjustable-rate mortgages due to an insufficient sample size.

A composite rate of all mortgage loans, including adjustable-rate loans, was 5.25% in July, up 17 basis points from the 5.08% rate in June. The national average contract mortgage rate for the purchase of previously occupied homes by combined lenders, used as an index in some adjustable-rate mortgage contracts, was 5.26% for loans closed in July, fractionally higher than in June.

The FHFA also reported that the effective interest rate, which reflects the amortization of initial fees and charges, was 5.35% in July, up 19 basis points from the 5.16% level for June. Initial fees and charges were 0.67% of the loan balance in July, up nine basis points from June.

For conventional mortgage loans originated in July, 42% were "no-point" mortgages, compared with a 45% rate in June. The FHFA said the average term for loans in July was 28.4 years, compared with 28.5 years in June.

-By Judith Burns, Dow Jones Newswires; 202-862-6692; [e-mail]