U.S. 30-year mortgage rate slides to 6.83%, lowest since June
20 December 2023
(Bloomberg) -- US mortgage rates slid for a fifth-straight week, reaching the lowest level since June in a welcome sign for potential home buyers.
The contract rate on a 30-year fixed mortgage dropped by 24 basis points to 6.83% in the week ended Dec. 15, Mortgage Bankers Association data showed Wednesday. The rate on five-year adjustable mortgages also decreased.
At the same time, the group's index of home-purchase applications eased 0.6% from the highest level since August. Combined with a decline in refinancing, the MBA's overall index of mortgage applications decreased 1.5%, the first drop since the end of October.
While mortgage rates remain elevated, the steady decrease is good news for a housing market left battered this year by a series of interest-rate hikes from the Federal Reserve.
The yield on the 10-year Treasury note has fallen more than a percentage point from its October peak on prospects the central bank will start cutting rates next year. Mortgage rates rend to move in tandem with government yields.
The MBA rates data suggest the potential for the housing market to gain some traction. Data out Tuesday showed housing starts climbed to a six-month high in November as builders benefit from a lack of inventory in the resale market.
While demand for new homes has firmed, sales of previously owned properties remain lackluster as many homeowners with mortgages at much lower rates are reluctant to sell. The National Association of Realtors will issue its November existing-home sales report later on Wednesday.
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% of all retail residential mortgage applications in the US.
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