US mortgage rates drop again to lowest level since April 2023

US MORTGAGE rates fell again last week to the lowest level since April 2023, spurring a modest pickup in applications to buy a home.

The contract rate on a 30-year fixed mortgage eased for a fourth week to 6.44 per cent, the longest stretch of declines this year, according to Mortgage Bankers Association (MBA) data released on Wednesday (Aug 28). That provided a small boost to home-purchase applications in the week ended Aug 23 after a sizable drop in the prior period.

Mortgage rates move in tandem with Treasury yields, which have been falling recently on expectations the Federal Reserve will start cutting interest rates in September. Minutes of the central bank’s July meeting last week indicated “several” officials saw a case for reducing rates at the time, and chair Jerome Powell said on Friday “the time has come for policy to adjust.”

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