Contract Mortgage Rates Fall in November

The Federal Housing Finance Agency (FHFA) recently reported that the national average contract mortgage rate for the purchase of previously occupied homes by combined lenders was 4.42% for November. That figure is down from October’s rate of 4.47%.

The FHFA also reported that the average interest rate on conventional 30-year fixed-rate mortgage loans of $417,000 or less decreased 12 basis points (bps) to 4.38% in November. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages and the results reflect loans closed between November 23 and November 30.

The contract rate on the composite of all mortgage loans (fixed-rate and adjustable-rate) was 4.35% in November, down 9 bps from 4.44% the previous month, according to the FHFA. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.46% in November, down 11 bps from October’s figure of 4.57%.

This adjustable-rate mortgage index was the only index rate that federally chartered savings and loan associations could use as an adjustable-rate mortgage index in the early 1980s. Many lenders use the national average contract mortgage rate in adjusting some adjustable-rate mortgages.

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