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Applications to Buy Homes on the Upswing as Mortgage Rates Near an Almost Three-Month Low

By Augusta Saraiva

Applications to buy US homes resumed an upward trend last week as borrowing costs steadied near an almost three-month low.

The Mortgage Bankers Association’s purchase index climbed 4% in the week ended Dec. 9, according to data released Wednesday. The measure has increased in five of the last six weeks as mortgage rates declined.

Homes in Rocklin, California, US, on Tuesday, Dec. 6, 2022. A record number of homes are being delisted as sellers face a sharp drop in demand, according to real estate brokerage Redfin. Photographer: David Paul Morris/Bloomberg

The contract rate on a 30-year fixed mortgage ticked up 1 basis point to 6.42% last week, but is down since reaching a more than two-decade high of 7.16% in late October.

After deteriorating for much of this year, the housing market may stabilize as mortgage rates retreat. The Federal Reserve is projected to step down its pace of interest-rate hikes to half a percentage point later Wednesday, and cooler inflation data, if sustained, may warrant a pause in the hiking cycle early next year.

MBA’s overall measure of mortgage applications, which includes refinancing, climbed 3.2%, the most since mid-September. The index of refinancing activity also advanced.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

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