US mortgage interest rates fall back below 7%

(Reuters) – The average interest rate on the most popular U.S. home loan saw its biggest drop in a week since July, falling to just under 7%, amid signs that inflation has risen above its spike drove down Treasury yields, according to data from the Mortgage Bankers Association (MBA) showed on Wednesday.

The average contract rate on a 30-year fixed-rate mortgage fell 24 basis points to 6.90% for the week ended Nov. 11 as financial markets were encouraged by last week’s data that pointed to a slowdown high inflation, which would allow the Federal Reserve to scale back its steep interest rate hikes.

The yield on the 10-year note serves as a benchmark for mortgage rates.

Despite this good news, mortgage rates are still more than double what they were at the start of the year and the US central bank’s rapid increases in its overnight rate have weighed heavily on the lending sector. dwelling.

The MBA Market Composite Index, a measure of mortgage application volume, rose 2.7% from the previous week.

The central bank is expected to slow its pace of rate hikes to a half-percentage-point increase at its next meeting on Dec. 13-14 after raising its key rate by 75 basis points in the past four meetings, because it gives time to the economy. absorb the fastest pace of monetary policy tightening in 40 years.

(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)

Leslie M. Gill