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US mortgage rates rise for fourth week as applications drop – view from across the pond

  • 04/03/2024
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US mortgage rates rise for fourth week as applications drop – view from across the pond
Mortgage Solutions takes its regular weekly look across the Atlantic and examines what’s going on in the US mortgage market.

Average mortgage rates in the US mortgage market increased for the fourth week running, nearing seven per cent. 

In its latest Primary Mortgage Market Survey, figures from the Federal Home Loan Mortgage Corporation (Freddie Mac) showed the 30-year fixed rate averaged 6.94 per cent, higher than the previous week’s 6.9 per cent.

This was also up from the average of 6.65 per cent in 2023. 

The average 15-year fixed rate fell slightly from 6.29 per cent to 6.26 per cent week-on-week. This was also higher than the previous year’s average of 5.89 per cent. 

Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates continued their ascent this week, reaching a two-month high and flirting with seven per cent yet again. 

“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying. While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.” 


US mortgage applications fall

Meanwhile, a 5.6 per cent drop in mortgage applications was recorded in the Mortgage Bankers Association’s (MBA’s) Weekly Mortgage Applications Survey. 

This was compared to the previous week and on a seasonally adjusted basis. 

On an unadjusted basis, there was a three per cent decline compared to the week before. 

“Mortgage rates were little changed last week, with the 30-year conforming rate declining slightly to 7.04 per cent, but remaining about a quarter percentage point higher than the start of the year,” said Mike Fratantoni, MBA’s senior vice president and chief economist.

He said: “Higher rates in recent weeks have stalled activity, and last week it dropped more for those seeking Federal Housing Administration and Veterans Affairs refinances.

“Purchase activity is running 12 per cent behind last year’s pace, but our January Builder Application Survey results showed that applications to buy new homes were up 19 per cent compared to last year. This disparity continues to highlight how the lack of existing inventory is the primary constraint to increases in purchase volume.”

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