The drop in the 30-year mortgage rate had a positive effect in several areas real estate market last week.
“The 30-year fixed rate fell in its biggest weekly decline since 2020.” — fell 31 basis points to 5.43 percent,” said Joel Kan, vice president of economics and industry forecasting at MBA. “Both refinancing and purchase applications have increased as interest rates have fallen, but activity is still down compared to last year.”
The mortgage interest rate has decreased from 5.74 percent
The move caused a domino effect, with the refinancing index up 2% from last week.
The seasonally adjusted purchasing index rose 1% from last week.
Overall demand for mortgage applications has been on the rise, rising 1.2% last week.
“Lower mortgage rates combined with signs of more inventory coming onto the market could spur buying activity,” Kan added.
The Federal Reserve raised its key interest rate by 75 basis points last week to curb rising inflation. The move puts the key federal funds rate between 2.25% and 2.50%, the highest since the pandemic began two years ago.
The survey covers more than 75% of all US retail mortgage applications and has been conducted weekly since 1990.