Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
Good news is on the horizon for U.S. homebuyers as mortgage rates continue their downward trend.
In the week ending Aug. 23, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) dipped from 6.50% to 6.44%. This marks the lowest level since April 2023 and the fourth consecutive week of rate declines.
Trending Now:
-
A billion-dollar investment strategy with minimums as low as $10 — you can become part of the next big real estate boom today.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund’s prospectus. Read them carefully before investing. -
This billion-dollar fund has invested in the next big real estate boom, here’s how you can join for $10.
This is a paid advertisement. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund’s prospectus. Read them carefully before investing.
Yields on a 30-year Treasury bond – a key benchmark for mortgage costs – fell by 5 basis points to 4.09% in the week ending Aug. 23.
Despite the easing rates, homebuyers are still taking a wait-and-see approach. Mortgage applications saw a modest increase of 0.5% from the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Refinancing activity, which is more sensitive to changes in interest rates, showed a slight decline. The Refinance Index fell by 0.1% from the prior week, though it remains 85% higher than the same week last year, reflecting a robust annual surge in homeowners looking to take advantage of the lower rates.
Adjustable-rate mortgages (ARMs) also saw a decrease in interest rates. The average contract interest rate for 5/1 ARMs fell to 5.98% from 6.25%, indicating some relief for borrowers seeking more flexible loan terms.
“As observed in recent weeks, despite lower rates, purchase applications have not moved much. Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase,” said Joel Kan, MBA’s vice president and deputy chief economist.
Read More:
Mortgage-Linked Stocks Jump To 2-Year Highs
The decline in mortgage rates is also having a notable impact on mortgage-linked stocks. The iShares Residential and Multisector Real Estate ETF (NYSE:REZ) closed 0.6% higher on Tuesday, reaching its highest levels since late August 2022. The ETF is currently on a 14-week winning streak, fueled by rising expectations of potential Federal Reserve interest rate cuts.
Investor sentiment toward the sector is strong, with $135 million in net inflows into the REZ ETF in August 2024 alone, marking the largest monthly influx since January 2022. This surge underscores investor optimism about the real estate market’s future as borrowing costs continue to ease.
A 9% Return In Just 3 Months
EquityMultiple’s ‘Alpine Note — Basecamp Series’ is turning heads and opening wallets. This short-term note investment offers investors a 9% rate of return (APY) with just a 3 month term and $5K minimum. The Basecamp rate is at a significant spread to t-bills. This healthy rate of return won’t last long. With the Fed poised to cut interest rates in the near future, now could be the time to lock in a favorable rate of return with a flexible, relatively liquid investment option.
What’s more, Alpine Note — Basecamp can be rolled into another Alpine Note for compounding returns, or into another of EquityMultiple’s rigorously vetted real estate investments, which also carry a minimum investment of just $5K. Basecamp is exclusively open to new investors on the EquityMultiple platform.
Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.
This article Mortgage Rates Hit 17-Month Lows, But ‘Homebuyers Are Staying Patient’ As Applications Stall originally appeared on Benzinga.com