U.S. Mortgage Rates Drop Below 7% for the First Time Since March

Mortgage
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The U.S. mortgage rates have seen a slight decline this week, but not enough to significantly drive up the demand.

According to a report from the Mortgage Bankers Association (MBA), the contract rate on a 30-year fixed-rate mortgage came down from 7.02% to 6.94% this week, the first time it came below 7% since March. The contract rate for a five-year adjustable-rate mortgage is at 6.27%, which represents its lowest point since February.

The dip is attributed to encouraging data that showed softening inflation, prompting traders to believe the Federal Reserve will move on with interest rate cuts sooner rather than later.

MBA’s index of mortgage applications to buy a home saw an uptick of 1.8%, while the overall volume of mortgage applications, which also takes into account refinancing, was up 0.9% on the week.

Steep home prices are what’s likely hampering the mortgage applications, but MBA expects that the activity on the home market will pick up later this year.

“Purchase volume is still more than 10 percent behind last year’s pace, but MBA is forecasting a pickup in home sales for the remainder of the year as more inventory is hitting the market,” MBA’s SVP and chief economist Mike Fratantoni told CNBC.

Jas M
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