Federal Housing Administration (FHA) Interest Rate and Home Buying Activity: Washington, D.C. Metropolitan Area

摘要

Covering the period from January 1977 through July 1983, this report primarily discusses the Federal Housing Administration's (FHA) interest rate changes and their effect on both house buying attitudes of consumers and the level of single family home mortgage applications that have been received for processing in the Washington, D.C., HUD Area Office. During the last 6.5 years, the FHA interest has changed 33 times, from a low of 8.0 percent to a high of 17.5 percent. The interest level has become the critical factor which prospective buyers consider when contemplating the purchase of a house. As interest rates ascended and descended with great frequency during the last 6 years, the level of applications submitted to the DC Area Office for FHA mortgage insurance also fluctuated. From 1977 to 1982, the financial characteristics of an FHA home buyer have changed significantly. While an FHA home buyer's net effective family income increased by 105 percent over the 5 - year period, the monthly principal and interest payments have increased by 187 percent, reflecting the large cost increase created by the rising interest rate. Tables and charts are supplied. (Author abstract modified -- prg).