The Zhitong Finance App noticed that US mortgage interest rates have risen to the highest level in 5 months, depressing home purchase applications for the 5th time in the past 6 weeks. According to data released by the American Mortgage Bankers Association on Wednesday, interest rates on 30-year fixed mortgage contracts rose 11 basis points to 7.24% in the week ending April 19, the highest level since November 24 last year. The home purchase mortgage application index fell 1%.
The overall application index, which includes home purchases and refinancing applications, fell 2.7% last week. Refinancing fell 5.6%, the biggest drop since February.
More than 7% of borrowing costs have opened a gap between the second-hand housing market and the new housing market. As potential buyers wait for interest rates to drop, it is difficult for second-hand home sales to gain momentum. This has limited housing and boosted housing prices.
Homebuilders are also benefiting from reduced resale inventory, and some companies are driving sales by providing cheaper financing and incentives. New home sales rebounded strongly last month, reaching the fastest rate since September last year.
The MBA survey has been conducted weekly since 1990, using responses from mortgage bankers, commercial banks, and savings institutions. This data covers over 75% of retail residential mortgage applications in the US.