US 30-year mortgage rate drops a fifth week to two-month low

US 30-year fixed mortgage rates fell for a fifth-straight week to the lowest level in two months, shoring up demand to buy a home.

The contract rate dropped 10 basis points to 6.3 per cent in the period ended Apr 7, Mortgage Bankers Association (MBA) data showed on Wednesday (Apr 12). The group’s index of mortgage applications for the purchase of a home increased 7.8 per cent, the most since mid January.

Mortgage rates have been falling as investors seek safety in Treasury bonds following the recent collapse of several banks. Even so, borrowing costs are still generally high and housing inventory is limited, which has kept a lid on homebuying activity.

Mortgage News Daily, which updates more frequently, put the 30-year rate at 6.52 per cent on Tuesday as Treasury yields climbed after data late last week showed a resilient job market.

The MBA’s index of refinancing applications ticked up 0.1 per cent, while the overall gauge of mortgage applications rose to the highest since early February.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75 per cent of all retail residential mortgage applications in the US. BLOOMBERG