Mortgage rates in the United States decreased last week by the most since the end of July, falling below 7% and causing an uptick in purchase applications, which had previously been declining.
According to data from the Mortgage Bankers Association, the contract rate for a 30-year fixed mortgage dropped by 24 basis points to 6.9% in the week ending Nov. 11. The group’s index of home-purchase applications rose 4.4%, the most since June, but remains near the lowest level since 2015.
The increase in demand allowed the total number of mortgage applications (including refinancing) to rise for the first time in two months. However, the refinancing activity index fell to a new 22-year low.
This year, as the Federal Reserve tightened monetary policy to help combat inflation, the rate-sensitive housing market rapidly deteriorated. Some policymakers are urging a slower pace of interest rate increases in the upcoming months after the growth of both consumer and producer prices in October eased more than anticipated. They do admit that inflation is too high, though.
Responses from commercial banks, thrifts, and mortgage bankers are used in the MBA survey, which has been conducted every week since 1990. More than 75% of all residential mortgage applications made by consumers in the United States are covered by the data.
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