US mortgage rates drop below 7% for first time since March

The drop in mortgage rates is spurring back-to-back increases in financing applications for home purchases. —Bloomberg

WASHINGTON: US mortgage rates declined below 7% last week for the first time since March, spurring back-to-back increases in financing applications for home purchases.

The contract rate on a 30-year fixed mortgage decreased eight basis points to 6.94% in the week ended June 14, according to Mortgage Bankers Association latest data.

The five-year adjustable-rate mortgage slid 18 basis points to 6.27%, matching the lowest level since February.

The index of mortgage applications to buy a home increased 1.6% to the highest level since March after jumping 8.6% in the prior week.

Mortgage rates move in tandem with Treasury yields, which also declined notably last week as government figures showed a broad cooling in inflationary pressures.

That prompted traders to boost bets the Federal Reserve is in a better position to move ahead with interest-rate cuts, possibly as soon as September.

The housing market early this year was showing signs of breaking free of a years-long slump until mortgage rates began to climb. — Bloomberg