Mortgage applications in the US fall 10.3%

The Mortgage Bankers Association (MBA) market composite index, which measures the volume of home loan applications, fell 10.3%, according to the latest available weekly data, following a 0.9% increase in the last week.

As data from the Mortgage Banking Association shows, mortgage applications have fallen significantly after two consecutive weeks of rises.

Specifically, between December 23 and 30, they contracted 13.2% compared to two weeks ago, supported by the 16.3% drop in the refinancing index and the 12.2% contraction in the purchase index. Thus, they are at the lowest level since 1996.

For its part, the average interest rate on 30-year mortgages —used as a reference for the US housing loan market— rose to 6.58 percent. The data from the previous week had shown a level of 6.34%, a minimum of three months.

Demand for homes in the United States has plummeted since early 2022 as rising inflation has led to aggressive interest rate hikes.

Although home prices have been slow to recover, the worst of the mortgage rate rally may be over as the Fed is slowing the pace of rate hikes and could ultimately be heading for a pause in its rate hike cycle. .

In December, the Fed increased the rate by 50 basis points, the eighth consecutive increase.