30-year fixed mortgage rate saw the biggest weekly decline since 2020

A decline in the rate on a 30-year mortgage had a positive effect on several areas of the real estate market in the past week.

“The 30-year fixed rate saw the largest weekly decline since 2020, falling 31 basis points to 5.43%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The drop in rates led to increases in both refinance and purchase applications, but compared to a year ago, activity is still depressed.”

Sold Home For Sale Real Estate Sign and House (iStock / iStock)

The mortgage rate fell from 5.74%.

CERTAIN HOUSING MARKETS MOST SUSCEPTIBLE TO DOWNTURN IN A RECESSION

That move set off a domino effect with the refinance index rising 2% from the previous week.

The seasonally adjusted purchase index increased 1% from the week before.

Home buyers get keys to their home

Real estate agent Sales manager holding filing keys to customer after signing of sale purchase agreement. (iStock / iStock)

Overall demand for mortgage applications was on the rise, gaining 1.2% in the past week.

“Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity,” added Kan.

FED RAISES INTEREST RATES BY 75 BASIS POINTS IN ANOTHER HISTORIC MOVE TO TACKLE INFLATION

The Federal Reserve raised its benchmark interest rate by 75 basis points last week, in an attempt to rein in rising inflation. The move puts the key benchmark federal funds rate at a range of 2.25% to 2.50%, the highest since the pandemic began two years ago.

Fed Chairman Jerome Powell addresses media

Federal Reserve Chair Jerome Powell pauses during a news conference in Washington. The Federal Reserve raised its benchmark interest rate by 75 basis points for the second straight month. (AP Photo/Manuel Balce Ceneta, File/AP Newsroom)

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The survey covers over 75% of all US retail residential mortgage applications and has been conducted weekly since 1990.

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