US mortgage rates contract for the first time in six weeks
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The US mortgage rate has fallen to 7.02% for the first time in six weeks, driving the home purchase application index to its highest level in a year.
Data from the Mortgage Bankers Association (MBA) shows the contract rate for a 30-year mortgage went down by 7 basis points with the reduced financing costs stimulating loan activity. For the week ending January 17, the 30-year fixed mortgage rate declined by 7 basis points to 7.02%.
Although the home purchase application index has been seasonally adjusted, fluctuations may still occur. This contraction has kept home purchase application indicators at their highest level in a year.
Following a surge in the previous week, the decline in financing costs further stimulated loan activity. The MBA’s home purchase application index increased by 0.6%.
Although the index has been seasonally adjusted, it may still experience significant fluctuations in the early weeks of the year. Mortgage rates are typically linked to US Treasury yields.
Last week, US Treasury yields fell due to better-than-expected inflation data with the market anticipating that the Federal Reserve may cut rates earlier than previously thought. This week, government bond yields continued to decline, partly because US President, Donald Trump did not immediately implement tariff policies early in his term.
This trend may further suppress mortgage rates in next week’s data. The MBA survey has been conducted weekly since 1990, covering feedback from mortgage bankers, commercial banks, and savings institutions. The survey data covers over 75% of retail residential mortgage applications in the United States.
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