US mortgage interest rates fall to two-month low (updated)

Applied Energetics

22/11/2023 17:10

(Adds Freddie Mac mortgage data, paragraph 4)
       Nov 22 (Reuters) - The average interest rate on the most
popular U.S. home loan fell last week to its lowest level in two
months as Treasury market yields, which act as a benchmark for
mortgage rates, continued to move lower on the back of cooling
inflation and a softening economy.
    The average contract rate on a 30-year fixed-rate mortgage
declined by 20 basis points to 7.41% for the week ended Nov. 17,
data from the Mortgage Bankers Association (MBA) showed on
Wednesday. It has declined 45 basis points over the past two
weeks and is now at its lowest level since late September.
    The yield on the 10-year Treasury note  US10YT=RR  acts as a
benchmark to set home loan costs. Home-purchasing borrowing
costs had reached two-decade highs near 8% in October.
    A more timely mortgage tracker also saw the average rate on
a 30-year fixed-rate mortgage fall to a two-month low. It fell
to 7.29% this week from 7.44% the week before, according to a
Freddie Mac survey released later on Wednesday.
    The third consecutive weekly decline in both gauges comes
amid signals that the Federal Reserve is unlikely to raise
interest rates further. At the beginning of the month it kept
its key overnight policy rate unchanged for a second straight
meeting and policymakers have since indicated they would raise
interest rates again only if progress in controlling inflation
faltered.
    The dip in mortgage rates meant more would-be purchasers.
The MBA's Market Composite Index, a gauge of mortgage
applications for both home purchases and refinancings of
existing loans, rose 3.0% from a week earlier to a six-week
high. 
    The MBA's Purchase Composite Index, a measure of all
mortgage loan applications for purchase of a single family home,
increased 3.9% from the prior week.
    Purchase applications, however, remain well below typical
levels, indicating would-be buyers are still waiting on the
sidelines despite the decline in rates. 
    Sellers locked into lower mortgage rates also continue to
hold their homes, keeping housing inventory tight.
    

 (Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama and
Will Dunham)
 ((Lindsay.Dunsmuir@thomsonreuters.com; +1 646 384 8221;))