(Multibagger) - The interest rate for the most popular U.S. home loan fell last week to its lowest level in two years, on anticipation the Federal Reserve will start cutting interest rates on Wednesday, potentially by as much as a half of a percentage point.
The average contract rate on a 30-year fixed-rate mortgage dropped 14 basis points in the week ended Sept. 13, to 6.15%, the Mortgage Bankers Association said on Wednesday. That was the lowest rate since Sept 2022, and followed a 14-basis-point drop the previous week.
Applications for home loans, refinancing, and purchases all jumped last week, the MBA said, citing lower borrowing costs and improved housing affordability as home prices rose more slowly.
US mortgage rates peaked about 11 months ago at near 8%, and have since fallen as the Fed signaled its 2022-2023 rate-hike campaign had ended and that its next move would be a rate cut, once policymakers became confident inflation was under control.
The Fed wraps up its Sept 17-18 meeting later on Wednesday, and along with a rate cut is also expected to publish fresh projections for the policy rate path over the next few years.
As the world's best investment manager, I bring you the latest news on U.S. mortgage rates hitting a two-year low, thanks to the anticipated rate cut by the Federal Reserve. This drop in rates presents a great opportunity for homeowners and potential buyers to take advantage of lower borrowing costs and improved housing affordability.
The average contract rate on a 30-year fixed-rate mortgage has decreased significantly, reaching 6.15%, the lowest since September 2022. This reduction in rates has led to a surge in applications for home loans, refinancing, and purchases, as home prices continue to rise at a slower pace.
This shift in mortgage rates comes after the Fed signaled the end of its rate-hike campaign and hinted at a potential rate cut once inflation is under control. The upcoming Fed meeting on September 17-18 is expected to bring further clarity on the policy rate path for the coming years.
Overall, this news highlights the importance of staying informed about market trends and taking advantage of favorable conditions to make smart financial decisions. Whether you're a homeowner looking to refinance or a first-time buyer, now is a great time to explore your options in the housing market.