The number of people applying for mortgages in the United States decreased by 5.1%. This decline follows a smaller drop of 1.3% the week before, interrupting a significant increase in mortgage demand that we saw throughout September, which had almost reached 30%. This recent decrease in applications is closely connected to changes in mortgage rates.
Impact of Economic Indicators on Mortgage Rates
Mortgage rates have started to climb, influenced mainly by the latest long-term Treasury yields. This increase is a reaction to strong job market figures, which suggest that the Federal Reserve might adopt a less accommodative approach soon.
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Home Loan Refinancing Applications Dip Significantly
The applications for refinancing home loans, which are particularly sensitive to even minor changes in interest rates, saw a notable decrease of 9% last week. However, it’s important to highlight that the volume of these refinancing applications remains significantly higher—double, in fact—compared to this time last year.
Conversely, the applications for purchasing new homes remained relatively stable, showing little to no change from the week prior. This stability suggests that, despite fluctuations in refinancing rates, the interest in acquiring new homes is steady.
