Mortgage rates in the United States have fallen to their lowest levels since early April, leading to a surge in refinancing applications. The Mortgage Bankers Association (MBA) reported that the average contract rate for 30-year fixed mortgages decreased by 9 basis points to 6.79%. The rate for 15-year fixed mortgages also dropped to 6.06%, marking the fourth consecutive week of decline.
The association's refinancing index rose by 6.5%, reaching its highest point since the week of April 11. Meanwhile, the index for home purchase financing remained stable, reflecting the ongoing challenges in the housing market due to affordability issues. Despite this, an increase in housing inventory is starting to ease the upward pressure on home prices.
Further declines in borrowing costs could provide much-needed support to the struggling real estate market. Mortgage rates often move in tandem with U.S. Treasury yields, which have recently fallen due to market expectations of an impending Federal Reserve rate cut amid slowing economic growth and hiring.
