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Mortgage rates drop below 7% in biggest decline since July

By Molly Smith Bloomberg

U.S. mortgage rates the prior week by the most since the end of July, slipping below 7% and helping generate a bounce in purchase applications that otherwise remain depressed.

The contract rate on a 30-year fixed mortgage decreased 24 basis points to 6.9% in the week ended Nov. 11, according to Mortgage Bankers Association data released Wednesday.

The group’s index of applications to buy a home rose 4.4% – the most since June – but is still near the weakest level since 2015.

The pickup in demand allowed the overall measure of mortgage applications, which includes refinancing, to rise for the first time in two months.

The index of refinancing activity, however, fell to a fresh 22-year low.

The rate-sensitive housing market has deteriorated rapidly this year as the Federal Reserve tightens monetary policy to help reduce inflation.

After consumer and producer price growth in October both eased by more than forecast, some policymakers are pushing for a slower pace of interest-rate hikes in the coming months.

Still, they acknowledge that inflation is far too high.

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 U.S.

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