US mortgage rates declined last week to a three-month low, though a slight easing in home-purchase applications underscores a still-challenged housing market.
(Bloomberg) — US mortgage rates declined last week to a three-month low, though a slight easing in home-purchase applications underscores a still-challenged housing market.
The contract rate on a 30-year fixed mortgage decreased to 6.34% in the week ended Dec. 16 from 6.42%, according to Mortgage Bankers Association data released Wednesday. Rates are down 82 basis points since reaching a more than two-decade high of 7.16% in late October.
The group’s index of mortgage applications for home purchases slipped 0.1% from an almost three-month high the prior week.
Housing demand has collapsed since the start of the year as rapid inflation prompted aggressive interest-rate increases by the Federal Reserve, though home prices have been slow to settle back. Nonetheless, the worst of the spike in mortgage rates may be over as central bankers dial back the pace of interest rate increases and ultimately move toward a pause in their hiking cycle.
MBA’s overall measure of mortgage applications, which includes those for refinancing, rose 0.9%. The index of refinancing activity climbed 6%, the largest advance in three months.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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