US 30-year fixed mortgage rate falls; prospective buyers stay on the sidelines
There has been no surge in home loan applications, with homeowners taking advantage of lower borrowing costs to refinance
[WASHINGTON] Mortgage rates in the US fell this week, but an uncertain economic outlook and tepid hiring are keeping prospective homebuyers on the sidelines.
The average rate on the popular 30-year fixed-rate mortgage dropped to 6.3 per cent from 6.34 per cent last week, mortgage finance agency Freddie Mac said on Thursday (Oct 9). It averaged 6.32 per cent during the same period a year ago.
Mortgage rates have eased as the Federal Reserve resumed cutting interest rates amid a stagnant labour market, characterised by low layoffs and lacklustre hiring. There has been no surge in home loan applications, with homeowners taking advantage of the lower borrowing costs to refinance.
A separate report from real estate company Redfin confirmed that buyers remain hesitant, noting that pending home sales decreased 1.3 per cent from a year ago in September; this marked the biggest drop in five months.
“But buyers aren’t budging,” Redfin said. “The typical home that sells is taking 48 days to go under contract, a week longer than last year and the longest September span since 2019.”
Redfin said its agents in much of the US reported that prospective homeowners were waiting for mortgage rates to fall even further before wading back into the market.
“Some prospective buyers are also wary of making a big purchase while the economy is uncertain, with the government shutdown and recent weak jobs reports making some Americans insecure about their finances,” Redfin said. REUTERS
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