Soaring interest rates knock American mortgage activity

Soaring interest rates knock American mortgage activity

The previous week American customers filed the lowest number of requests for a mortgage since late 2014 due to the fact that the vast majority of home borrowing costs hit their highest value for more than seven years. That’s what the Mortgage Bankers Association uncovered on Wednesday.

As a matter of fact, loan applications for home refinancing headed south to their lowest value since late 2000. At the same time, mortgage requests to purchase a home slipped to their lowest value for 20 months, as MBA data revealed.

The seasonally adjusted index on mortgage applications inched down by 7.1% hitting 322.1 by October 12. It happened to be the lowest outcome since 296.9 recorded on December 26, 2014. What’s more, it appeared to be the steepest weekly slump for 13 months.

The ascend in mortgage rates turns out to be another headwind for the housing sector, which is currently struggling with poor inventory as well as soaring building costs.

Home borrowing costs tacked on, influenced by a shocking selloff in the American bond market, which in turn pushed the yield on benchmark 10-year Treasury notes to up to 3.261% that appeared to be its highest outcome for 7-1/2 years.

Market participants had dumped bonds due to fears about soaring inflation as well as a faster tempo of rate lifts from the Fed justified by firm economic data.

Bond gains have rebounded on safe-haven demand for bonds backed by steep losses in global stock markets. On Wednesday, the 10-year gain accounted for 3.15%.

In addition to this, interest rates on 15-year fixed-rate as well as five-year adjustable-rate mortgages amounted to respectively 4.50% and 4.34%, thus demonstrating their highest outcomes for more than seven years.

Additionally, the average rate on jumbo mortgages slumped to 4.98%.

 

Similar

CPI Wednesday: the Doomsday for EURUSD and GBPUSD?
CPI Wednesday: the Doomsday for EURUSD and GBPUSD?

Today, the US Inflation release at 15:30 GMT+3 will determine the further destiny of the major pairs and gold. The event is highly impactful, as the Federal Reserve will make decisions regarding further rate hikes based on it. Also, we brought you some news about XAUUSD and GBPUSD. Stay tuned!

Latest news

Gold Rises as Central Banks Buy More
Gold Rises as Central Banks Buy More

About 24% of global central banks intend to increase gold reserves in 2023. Rising inflation, geopolitical turmoil, and worries about interest rates are reasons to increase gold reserves.

US Evades Default This Time
US Evades Default This Time

Greetings to a brand new week full of events, economic releases and US debt frictions. We are here to tell you everything you need to know!

USD Gains Momentum
USD Gains Momentum

The US dollar index breaks one resistance after another. Read the report to learn the next target for the US dollar index!

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera