US mortgage rates fall to 6.87%, lowest level since early March

US MORTGAGE rates fell last week to their lowest level since early March, a reprieve for potential homebuyers and an industry seeking a much-needed demand tailwind.

The contract rate on a 30-year fixed mortgage dropped 13 basis points to 6.87 per cent in the week ended Jul 12, according to Mortgage Bankers Association (MBA) released on Wednesday (Jul 17). The rate on the 15-year mortgage declined to 6.49 per cent.

Mortgage rates move in tandem with Treasury yields, which also declined notably last week as government figures showed a broad cooling in inflationary pressures. That prompted traders to boost bets the Federal Reserve is in a better position to move ahead with interest rate cuts, possibly as soon as September.

A seasonally adjusted gauge of mortgage applications to buy a home slipped 2.7 per cent, the report showed. Data can be volatile around holidays, and the latest weekly figures followed Independence Day. On an unadjusted basis, purchase applications jumped 22 per cent.

MBA’s adjusted overall index of applications, which includes those for home purchases and refinancing, increased 3.9 per cent. The group’s refinancing gauge climbed 15.2 per cent.

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