Reuters have reported that the Mortgage Bankers Association state that U.S. mortgage applications are now at their lowest level since the middle of February despite a decrease in borrowing costs.
In the week ended November 3rd, the Association’s weekly seasonally adjusted index revealed little change, standing at 389.7 against a figure of 389.8 the preceding week. The numbers are the lowest since the 371.5 amount in February this year.
The MBA also reported that on 30-year fixed rate conforming mortgages the average interest rate that was payable decreased from 4.22 percent the previous week to 4.18 percent. Loans with a balance of $424,100 or less are defined as conforming loans. They are so called because they carry guarantees from Fannie Mae and Freddie Mac, the federal mortgage agencies.
With other kinds of mortgages, the average rate remained the same as the previous week.
President Trump’s nomination of Jerome Powell to become the next head of the U.S. Central Bank caused mortgage rates to fall because of the effect the move had on the yield from bonds.
It is thought very likely that Powell will continue with the Fed’s policy of a gradual increase in interest rates as efforts continue to reduce the $4.5 trillion debt of the Fed.
In October, a spike in Bond yields was experienced because of worries that President Trump might opt for John Taylor, the Stanford University economist, to take over from Janet Yellen. Taylor is well-known for his hawkish views on the monetary policy of the U.S.
From a six-week low point, the MBA’s purchase mortgage activity gauge has risen by 0.5 percent and mortgage refinancing dropped by 0.5 percent to 1,290.8. That is the lowest it has been since the early days of July.
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