Mortgage applications saw a 3% increase in the week ending on November 17, as interest rates took a dip, providing a glimmer of hope in the current challenging housing market. This data was reported by the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. According to the MBA’s calculations, the 30-year fixed mortgage rate dropped to 7.41%, its lowest point in two months.
Bond yields in the United States continued their downward trend as new data pointed towards a weaker economy and signs of cooling inflation. Joel Kan, the MBA’s deputy chief economist, noted this in a press release, stating that while applications have reached their highest level in six weeks, they still remain at historically low levels.
Refinance activity experienced a modest 1.6% increase last week; however, it remains significantly below historic levels due to the fact that most borrowers already have mortgages with rates lower than the current market rates. According to Freddie Mac data from November 16, 30-year mortgage rates decreased for the third consecutive week to 7.44% as inflationary pressures eased.
The housing market eagerly awaits positive news like this, as recent reports from the National Association of Realtors revealed that home sales in October had dropped to their slowest pace in 13 years. Various factors, including high inflation, elevated interest rates, and mortgage rates, have posed challenges for potential homebuyers.