As U.S. mortgage interest rates fell below 7%, the number of weekly mortgage applications increased to the highest level since last March.
According to the Mortgage Bankers Association on the 19th (local time), the average weekly interest rate for a 30-year fixed-rate mortgage fell from 7.02% last week to 6.94%. It was the first time since March that the 30-year fixed mortgage interest rate fell below 7%.
In the same week, the mortgage application index rose 1.6%, indicating that demand for home purchases is increasing.
High home prices and mortgage interest rates in recent years have made many Americans feel that owning a home is out of reach.
According to the Census Bureau, the majority of U.S. households own a home, and nearly 66% will be homeowners by 2022. But homeowners who missed out on relatively low home prices and significantly lower mortgage rates in the years before the pandemic have found themselves in a tougher situation.
The 30-year fixed mortgage interest rate is expected to fall between 6.5 and 7.0% this year, but it is still high compared to the interest rate of less than 3% in 2020 and 2021.
The recent decline in mortgage interest rates is indirectly related to the slower-than-expected May inflation rate in the United States last week. This means that for mortgage interest rates to fall further, inflation must continue to fall.