Rates on New Home Loans Increase Slightly

Eye on Housing

Interest rates on loans for new homes increased slightly in March, according to data recently released by the Federal Housing Finance Agency (FHFA).  The average contract rate on conventional loans for newly built homes increased 13 basis points, to 3.50 percent.  Although initial fees and charges on the loans declined from 1.17 to 1.08 percent, that still resulted in an effective rate (amortizing the initial fees) that edged up 11 basis points, to 3.61 percent.  So far in 2013, rates on loans to purchase new homes have been drifting upward, reversing a downward trend that prevailed throughout most of 2011 and 2012.

Effect Rate Apr13

The average term on loans for new homes in March was 28.4 years, up 0.2 years from February.  Meanwhile, the average price and loan amount both increased—the average price from $387,100 to $388,400, the average loan amount from $291,200 to $295,300.   Neither is quite back up to the average dollar figures reported…

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