U.S. mortgage interest rates drop back below 7% - MBA

Applied Energetics

16/11/2022 12:00

Nov 16 (Reuters) - The average interest rate on the most
popular U.S. home loan saw its largest single-week decline since
July, dropping back to just below 7%, as signs inflation has
passed its peak sent Treasury yields lower, data from the
Mortgage Bankers Association (MBA) showed on Wednesday.
    The average contract rate on a 30-year fixed-rate mortgage
dropped by 24 basis points to 6.90% for the week ended Nov. 11
as financial markets took encouragement from data last week that
indicated high inflation was slowing, which would allow the
Federal Reserve to scale back its hefty interest rate hikes.
    The yield on the 10-year note  US10YT=RR  acts as a
benchmark for mortgage rates.
    Despite the good news, mortgage rates are still more than
double what they were at the beginning of the year and the U.S.
central bank's swift increases in its benchmark overnight
lending rate has weighed heavily on the housing sector.
    The MBA's Market Composite Index, a measure of mortgage loan
application volume, rose 2.7% from a week earlier. 
    The central bank is expected to slow its pace of rate hikes
to a half percentage point increase when it next meets on Dec.
13-14 after lifting its policy rate by 75 basis points for the
past four meetings, as it allows time for the economy to absorb
the fastest pace of tightening of monetary policy in 40 years.
 (Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)
 ((Lindsay.Dunsmuir@thomsonreuters.com; +1 646 384 8221;))