They reach levels not seen since June
US mortgage rates declined for the fifth consecutive week and reached a level not seen since June, according to data from the Mortgage Bankers Association (MBA).
MBA’s data found that the contract rate on a 30-year fixed mortgage dropped to 6.83% in the week ending on December 15. The rate on five-year adjustable mortgages also declined.
Meanwhile, MBA’s index of home-purchase applications eased by 0.6% which is the highest level seen since August. Its overall index of mortgage applications also decreased by 1.5%, which was the first drop seen since the end of October.
The decrease seen served as a good sign for the housing market following a year filled with interest rate hikes from the Federal Reserve.
The yield on the 10-year Treasury note has decreased more than a percentage point from its peak in October, which suggests that the central bank will begin to cut back on rates in the upcoming year as mortgage rates have the tendency to move in conjunction with government yields.
The MBA rates data also suggested there was potential for the housing market to gain some traction with recent data showing that housing starts increased to a six-month high in November. This was as builders benefitted from a lack of inventory in the resale market.
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