TechFlow news, September 10 — According to Jinshi Data, U.S. mortgage rates dropped last week to their lowest level in nearly a year, spurring a surge in refinancing activity and encouraging potential homebuyers to enter the market. Data released Wednesday by the Mortgage Bankers Association (MBA) showed that the average contract rate for 30-year fixed-rate mortgages fell 15 basis points to 6.49% for the week ending September 5. Rates on 15-year fixed-rate loans and five-year adjustable-rate mortgages also declined to their lowest levels in about a year. This decline was sufficient to push MBA's mortgage market index—covering both purchase and refinance applications—to its highest level in three years.
If financing costs continue to fall, they could provide much-needed support to the weak housing market. Residential construction has been a drag on the U.S. economy, weighing down gross domestic product (GDP) in four of the past five quarters. MBA's purchase mortgage application index rose 6.6%, reaching its highest level since the first week of July. The refinancing index increased more than 12%, hitting its highest point in nearly a year.
