WASHINGTON -- The popularity of 30-year fixed-rate mortgages continued in April despite an increase in interest rates, according to data released by the Federal National Mortgage Association.
Fannie Mac said fixed-rate mortgages continued to account for almost two-thirds of its total business volume last month, representing 61.6% of the company's loan volume, up significantly from 54.2% in January.
Adjustable, balloon, and Fannie Mae's proprietary Two-Step mortgage business also rose, but together comprised less than 1096 of April volume. "Even with the recent rise in mortgage interest rates, a 30-year fixedrate loan at 8.5% is still a fantastic deal for consumers," said Donna Callejon, senior. VP singie-family marketing.
However, Fannie's figures may have been influenced by the surge in popularity of adjustable-rate loans offered by portfolio lenders, and which thus do not flow to Fannie Mac. This would hold down the number of ARMs flowing to the agency.
Ms. Callejon also noted that the slowdown in refinancings had curtailed the popularity of 15-year and 20-year loans. Volume in 15-year fixed-rate mortgages decreased to its lowest level in 21/2 years, from 34.2% in January to 26.5% in April. Twenty-year loans decreased from 3.7% to 2.6%.
Ms. Callejon said that many lenders were offering a Fannie Mac loan with a starting interest rate as much as three-eights of a percentage point lower than on a 30-year fried mortgage for the first five or seven years.
