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US mortgage applications rise in light of rate falls – view from across the pond

  • 13/03/2024
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US mortgage applications rise in light of rate falls – 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.

The latest Primary Mortgage Market Survey from the Federal Home Loan Mortgage Corporation (Freddie Mac) shows that the average 30-year fixed rate came to 6.88 per cent this week.

This is a fall from 6.94 per cent last year, but up from 6.73 per cent the same time last year.

Our update last week showed that average mortgage rates in the US mortgage market had risen for the fourth week in a row.

The average 15-year fixed rate is priced at 6.22 per cent, a fall from 6.26 per cent last week and compared to 5.95 per cent in the same period last year.

Sam Khater, Freddie Mac’s chief economist, said: “Evidence that purchase demand remains sensitive to interest rate changes was on display this week, as applications rose for the first time in six weeks in response to lower rates.

“Mortgage rates continue to be one of the biggest hurdles for potential homebuyers looking to enter the market. It’s important to remember that rates can vary widely between mortgage lenders so shopping around is essential.”


US mortgage applications rise

Mortgage applications rose by 7.1 per cent 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, applications increased by eight per cent compared with the previous week.

Mike Fratantoni, MBA’s SVP and chief economist, said: “Mortgage rates dropped below seven percent last week for most loan types because of incoming economic data showing a weaker service sector and a less-robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months.

“Purchase application volume increased for the week but remains about 11 percent below last year’s level. By contrast, refinance volume picked up by 12 percent, with a larger 24 percent increase in the government refinance index.

“While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years.”

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