In encouraging news for US mortgage holders, the 30-year mortgage rates saw their steepest decline in two years last week, hitting their lowest point since May 2023 and triggering a significant increase in refinancing applications.
According to data released Wednesday by the Mortgage Bankers Association, the contract rate on a 30-year fixed mortgage fell by 27 basis points to 6.55% in the week ending August 2. The rate on a five-year adjustable mortgage dropped 31 basis points to 5.91%, the lowest level this year.
Refinancing activity surged nearly 16% last week, reaching a two-year high of 661.4. Mortgage applications for home purchases rose by 0.8%, marking the first increase in a month. The overall mortgage application index, which includes both refinancing and purchase applications, climbed 6.9% last week to its highest level since the beginning of the year.
Thomas Ryan, North America economist at Capital Economics, noted in a report that the drop in rate ...
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