"Mortgage rates are finally falling, and just saw their biggest weekly drop in the past year. The average interest rate for a 30-year fixed-rate mortgage in the past week was 6.35%, according to Freddie Mac, down from 6.5% a week earlier. That's the lowest average since last October. Rates have been above 6.5% for most of the last year, climbing above 7% in January."
"As rates dropped, borrower demand surged. Applications to buy a home and to refinance were both up on a weekly and annual basis, according to the Mortgage Bankers Association. Refinances made up nearly half of those applications, as those who bought homes at higher rates jumped at the chance to lower their monthly mortgage payments. Purchase applications, meanwhile, rose to their highest level since July."
"The Treasury yields that affect mortgage rates moved lower with the data that the labor market is weakening. The jobs report last week showed that U.S. employers added just 22,000 jobs in August, and a revised report on Tuesday showed that hiring for the last 12 months ending in March was much lower than initially tallied. The Federal Reserve is expected to cut the fed funds rate at its meeting next week."
Mortgage rates fell to an average 6.35% for a 30-year fixed mortgage, down from 6.5% the prior week and the lowest since last October. Rates stayed above 6.5% for most of the past year and exceeded 7% in January. The decline in rates prompted a surge in borrower demand, with both purchase and refinance applications rising on weekly and annual bases; refinances accounted for nearly half of applications and purchase apps reached their highest level since July. Treasury yields moved lower amid weakening labor-market data, and the Federal Reserve is expected to cut the fed funds rate next week, though mortgage rates may already reflect that expectation.
Read at www.npr.org
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