Ticker | Status | Jurisdiction | Filing Date | CP Start | CP End | CP Loss | Deadline |
---|
Ticker | Case Name | Status | CP Start | CP End | Deadline | Settlement Amt |
---|
Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
---|
Expectations that the Federal Reserve will soon begin cutting interest rates have driven mortgage rates to their lowest levels in over a year Wednesday, positively impacting both new mortgage applications and refinancing of existing loans.
The average contract interest rate for 30-year fixed-rate mortgages — with conforming loan balances of $766,550 or less — fell significantly by 27 basis points to 6.55% for the week ending Aug. 2, marking the lowest rate since early May 2023
The decrease of 27 basis points from the rate of 6.82% on July 26 represents the largest weekly drop since July 2022 and reflects sizable reductions in Treasury yields.
The 30-year Treasury yield, a key benchmark for mortgage costs, dropped 34 basis points during the week ending Aug. 2, reaching approximately 4.2%.
“Mortgage rates decreased across the board last week…following dovish communication from the Federal Reserve and a weak jobs report, which added to increased concerns of an economy slowing more rapidly than expected,” said Joel Kan, the Mortgage Bankers Association’s vice president and deputy chief economist.
Mortgage applications soared by 6.9% during the week ending Aug. 2, the sharpest increase in nearly two months and fully erasing the cumulative declines in applications from the two prior weeks.
Applications for a loan to refinance a mortgage, which are more sensitive to weekly changes in interest rates, soared by nearly 16%. The MBA Mortgage Refinance index rose to the highest level in two years.
Although the Federal Reserve kept the federal funds target unchanged at its July meeting, it hinted at a possible rate cut in September. Market speculation around a Fed rate cut sharply increased as a result of a weaker-than-expected July jobs report.
Commenting on the data, MBA chief economist Mike Fratantoni said: “The weakness in this report including the slower rate of wage growth and the higher unemployment rate certainly support such a cut, but the next inflation report needs to confirm that price growth is also slowing.
"The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity," he said.
Shares of real estate companies surged in premarket trading on Wednesday, with the Vanguard Real Estate ETF (NYSE:VNQ) rising by 0.8%, following a 2% gain on Tuesday. The VNQ ETF is on course to reach levels not seen since January 2023.
Top premarket gainers were Howard Hughes Holding (NYSE:HHH), up 14.5%, Peakstone Realty Trust (NYSE:PKST), up 5.4%, Opendoor Technologies Inc. (NYSE:OPEN), up 4.6% and Hudson Pacific Properties Inc. (NYSE:HPP), up 4.4%.
Mortgage-linked stocks as tracked by the iShares Residential and Multisector Real Estate ETF (NYSE:REZ) are up over 2.5% in the premarket, after rallying 2.7% a day earlier. American Healthcare REIT, Inc. (NYSE:AHR) and Community Healthcare Trust Incorporated (NYSE:CHCT) led gains, up 9.4% and 2.9%, respectively.
Read now:
Photo via Shutterstock.