American mortgage rates fell for the first time since late March, providing some relief to home buyers and eliminating purchase and refinancing applications.
The contract rate of a 30-year fixed mortgage fell 11 basis points in the week ending May 3 to 7.18%according to data from the Mortgage Bankers Association published on Wednesday. Marks the first fall after four consecutive weekly increases which drove borrowing costs well above 7%.
The real estate market It is one of the parts of the economy most sensitive to interest rates. Mortgage rates fell during a week in which Federal Reserve Chairman Jerome Powell He said a rate hike was “unlikely” and data showed a slowdown in payrolls and wage growth.
Falling borrowing costs helped boost MBA application ratewhich includes home purchases and refinancings, by 2.6%. The refinancing index rose 4.5%.
Even so, the rates remain high (more than double what they were at the end of 2021) and low inventory has kept existing home sales at an annual rate of about 4 million homes over the past year,”without a measurable breakdown,”he said late last month National Association of Realtors chief economist Lawrence Yun.
The MBA Survey, which has been running weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data covers more than 75% of all US residential mortgage applications.
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