WASHINGTON D.C.: Data from the Mortgage Bankers Association released this week showed that the average interest rate on leading US home loans dropped to its lowest level since September, indicating that inflation has past its peak as Treasury yields decrease.
For the week ending on 31st January, the average contract rate on a 30-year fixed-rate mortgage fell by 6.23 percent to 19 basis points, as financial markets have been encouraged by recent data showing that inflation is slowing, which will enable the Federal Reserve to curb its interest rate hikes.
The yield on the 10-year note acts as a benchmark for mortgage rates.
As the Federal Reserve Bank raised its benchmark policy rate in 2022 at the most rapid rate in 40 years, mortgage rates surged to more than 7 percent in October.
Lower mortgage rates have attracted more buyers, with the Mortgage Bankers Association's Market Composite Index, a measure of mortgage loan application volume, rising 27.9 percent from last week, the highest increase since March 2020.
After lifting its policy rate by 50 basis points in December, the US central bank is expected to slow its pace of rate hikes to a quarter percentage point increase when it next meets on 31st January and 1st February.