Potential homebuyers are sensitive to rate changes, says industry group
- U.S. mortgage applications plunge as rates rise over 7%
- 30-year mortgage rate reaches highest level since mid-December
- Purchase index falls 10.1% and refinance index falls 11.4%
- Average contract rate for 30-year mortgage increases to 7.06%
- Rates expected to fall through 2024
U.S. mortgage applications have plummeted as mortgage rates have risen above 7%. The Federal Reserve’s decision to delay an interest rate cut has pushed rates up to their highest level since mid-December, dampening both buying and refinancing demand. The purchase index, which measures mortgage applications for home purchases, fell 10.1% from the previous week, while the refinance index dropped 11.4%. The average contract rate for a 30-year mortgage increased to 7.06%. Despite the current increase, forecasters predict that rates will eventually decline. However, the rise in rates may make it more expensive for potential homebuyers to purchase a home with a mortgage. As the spring home-buying season approaches, experts anticipate that mortgage rates will start to decline as inflation eases and the Fed begins cutting interest rates.
Factuality Level: 7
Factuality Justification: The article provides specific data and quotes from experts to support the information presented about the U.S. mortgage market. It does not contain any obvious misinformation or sensationalism. However, it lacks broader context and analysis, focusing mainly on the recent changes in mortgage rates.
Noise Level: 3
Noise Justification: The article provides relevant information about the recent plunge in U.S. mortgage applications due to rising mortgage rates. It includes key details such as the percentage decrease in mortgage applications, average contract rates, and expert opinions on the market impact. The article stays on topic and supports its claims with data from the Mortgage Bankers Association. However, it lacks in-depth analysis of long-term trends or solutions to mitigate the impact of rising rates.
Financial Relevance: Yes
Financial Markets Impacted: Mortgage market, housing market
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the impact of rising mortgage rates on mortgage applications and the housing market. It does not mention any extreme events or significant disruptions.
Private Companies: Redfin
Key People: Chen Zhao (Economic Research Lead at Redfin), Mike Fratantoni (Senior Vice President and Chief Economist at the Mortgage Bankers Association)
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