Effective commitment rates in early January on single-family mortgage loans fell to levels last seen more than two years ago, Federal Housing Finance Board Chairman Daniel F. Evans Jr., announced last week.
The effective commitment rate for both fixed-rate mortgages and adjustable-rate mortgages declined 13 basis points.
(One basis point is one-hundredth of 1 percent.)
The effective fixed rate declined from 10.26 percent in December to 10.13 percent in January 1991 -- the lowest level since April 1987. The effective commitment rate for ARMs declined from 9.29 percent in December to 9.16 percent in January -- the lowest since October 1988.
The spread between fixed commitment rates and ARM commitment rates remained unchanged from one month earlier at 97 basis points -- the second consecutive month that the spread was less than 1 percent.
The averages are based on a national survey conducted during the first five working days of January. Since that time, most interest rates, including that on mortgages, have declined by substantial amounts.
The average effective interest rate for all loans closed declined from 9.83 percent in December to 9.8 percent in January.