US mortgage rates have seen a significant drop, reaching their lowest point since mid-October, which has led to an increase in home purchase financing.
The 30-year mortgage contract rate fell by 17 basis points to 6.69% for the week ending November 29, marking the largest weekly decline since August. This data comes from the Mortgage Bankers Association (MBA), which released its findings on Wednesday.
The MBA’s index of home purchase applications rose 5.6% on a seasonally adjusted basis, reaching the highest point since the beginning of the year. This recent uptick in applications is part of a larger trend, with a roughly 18% increase observed over the past two weeks.
However, the data also show that these figures can experience significant fluctuations during the year-end holiday period.
The decline in mortgage rates is closely aligned with the recent drop in Treasury yields, as investors anticipate a more gradual approach from the Federal Reserve in lowering its benchmark rate.
There is a growing expectation that the Fed may enact a third consecutive reduction in borrowing costs at the upcoming meeting scheduled for December 17-18. Despite this, several Fed policymakers have indicated they are maintaining a flexible stance.
Amidst these changes, the MBA noted that the measure of refinancing has decreased for the ninth time in the past ten weeks, hitting its lowest point since May.
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