The 30-year mortgage rate plunged to the lowest since September, and demand to purchase homes increased.
According to data from the Mortgage Bankers Association, the 30-year fixed mortgage rate sunk to 6.49% in the week ending on November 25, down 65 basis points over the last three weeks and 18 basis points in the last week alone.
Meanwhile, the MBA’s mortgage purchase index surged 3.8%, representing the fourth straight gain. But refinance demand declined 13%, sending overall application volume 0.8% lower.
The central bank has increased rates by 375 basis points, this year in its efforts to tame sky-high inflation. That lifted bond yields, sending mortgage rates to 20-year-highs and causing existing home sales to buckle 24% in September.
But expectations that the Fed will start slowing the pace of its tightening has sent bond yields back down along with mortgage rates.
Still, industry experts are anxious over the industry’s health, with real estate brokerage Redfin predicting that home sales could continue to decline through 2023, and economists warning that housing prices could soon struggle as more stress is exerted on the sector.
