US mortgage rates fall for a fourth week to lowest since July

US MORTGAGE rates fell for a fourth consecutive week, spurring growth in applications for home purchases and refinancing.

The contract rate on a 30-year fixed mortgage fell by 10 basis points to 7.07 per cent in the week ended Dec 8, the lowest since July, according to the Mortgage Bankers Association (MBA). That boosted the group’s index of refinancing by 19.4 per cent, the most since the start of the year.

The lower financing costs will offer some relief to would-be homebuyers and sellers in a market hit hard by an extensive series of interest-rate hikes by the Federal Reserve. While the central bank is expected to hold rates steady later Wednesday (Dec 13), chair Jerome Powell will likely push back on market expectations for rate cuts as inflation remains stubborn.

Home-purchase activity climbed 3.5 per cent to the highest level since early August, MBA’s data showed. That helped lift the overall index of mortgage applications by the most since March.

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