‘Mortgage rates above 7% sure don’t help,’ industry-group says
- U.S. mortgage applications dip as rates stay over 7%
- Purchase index falls 4.5% and refinance index falls 7.3%
- Average contract rate for 30-year mortgage is 7.04%
- Concerns about how 7% mortgage rates could hurt sales
- Existing-home sales fell to a 29-year low in 2023
- Rising mortgage rates erode affordability for home buyers
- Lack of existing inventory is the primary constraint to increases in purchase volume
U.S. mortgage applications dipped in the latest week as mortgage rates stayed over 7%. Rates are higher on the back of market expectations that the Federal Reserve will not cut its benchmark interest rate in March. The overall market composite index fell 5.6% to 171.5 for the week ending February 23 from a week ago. The purchase index fell 4.5% and the refinance index fell 7.3%. The average contract rate for the 30-year mortgage was 7.04%. Concerns arise about how 7% mortgage rates could hurt sales, as existing-home sales fell to a 29-year low in 2023. Rising mortgage rates erode affordability for home buyers, who are already faced with rising home prices. The lack of existing inventory is the primary constraint to increases in purchase volume.
Factuality Level: 8
Factuality Justification: The article provides specific data and quotes from the Mortgage Bankers Association to support its claims about the U.S. mortgage market. It does not contain any obvious misinformation, sensationalism, or bias. The information presented is relevant and focused on the main topic.
Noise Level: 3
Noise Justification: The article provides relevant information about U.S. mortgage applications, market trends, interest rates, and their impact on home sales. It includes key details such as the average contract rates, purchase index, and insights from the Mortgage Bankers Association. The article stays on topic and supports its claims with data and quotes. However, it lacks in-depth analysis, antifragility considerations, and accountability of powerful people.
Financial Relevance: Yes
Financial Markets Impacted: Mortgage market, real estate industry
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 mortgage rates on mortgage applications and the real estate industry. There is no mention of an extreme event.
Public Companies: Federal Reserve (N/A)
Private Companies: Mortgage Bankers Association
Key People: Mike Fratantoni (Senior Vice President and Chief Economist at the Mortgage Bankers Association)
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