Post by ferris1248 on Aug 7, 2024 9:18:16 GMT -5
(Reuters) - The interest rate for the most popular U.S. home loan plunged last week to its lowest level in 15 months, after the Federal Reserve signaled it could start cutting its policy rate in September, and a downshift in the job market bolstered financial market bets the cuts would be big.
The average contract rate on a 30-year fixed-rate mortgage dropped 27 basis points in the week ended Aug. 2, to 6.55%, the Mortgage Bankers Association said on Wednesday. That was the lowest rate since May 2023, and the sharpest drop in two years.
The decline gives potential homebuyers some long-hoped-for relief in what has become an increasingly unaffordable housing market in recent years, as home prices and borrowing costs both rose.
It also gives some who bought homes when rates were higher the option to refinance and reduce payments. The MBA 30-year average rate topped out at 7.9% last October.
Refinancing applications rose sharply to the highest level in two years, the MBA said on Wednesday. But purchase activity edged up less than 1%, constrained by the low inventory of homes for sale that has pushed up prices.
The news also triggered a rally in U.S. Treasuries, sending down their yields -- which move inversely to bond prices -- and pulling closely linked mortgage rates down along with them, a silver lining for millions of U.S. households on the hunt for new homes, cheaper housing costs, or both.
Interest-rate futures now reflect bets the Fed will cut rates by a total of a full percentage point by the end of this year, starting with a reduction of half a percentage point next month.
finance.yahoo.com/news/us-30-mortgage-rate-drops-110227559.html
The average contract rate on a 30-year fixed-rate mortgage dropped 27 basis points in the week ended Aug. 2, to 6.55%, the Mortgage Bankers Association said on Wednesday. That was the lowest rate since May 2023, and the sharpest drop in two years.
The decline gives potential homebuyers some long-hoped-for relief in what has become an increasingly unaffordable housing market in recent years, as home prices and borrowing costs both rose.
It also gives some who bought homes when rates were higher the option to refinance and reduce payments. The MBA 30-year average rate topped out at 7.9% last October.
Refinancing applications rose sharply to the highest level in two years, the MBA said on Wednesday. But purchase activity edged up less than 1%, constrained by the low inventory of homes for sale that has pushed up prices.
The news also triggered a rally in U.S. Treasuries, sending down their yields -- which move inversely to bond prices -- and pulling closely linked mortgage rates down along with them, a silver lining for millions of U.S. households on the hunt for new homes, cheaper housing costs, or both.
Interest-rate futures now reflect bets the Fed will cut rates by a total of a full percentage point by the end of this year, starting with a reduction of half a percentage point next month.
finance.yahoo.com/news/us-30-mortgage-rate-drops-110227559.html