US Mortgage Rates Decline Despite Rising Home Sales; Mortgage Applications Up
The United States mortgage rates have gone down in the past despite rising demand for home loans. Mortgage rates are at a historic low of 2.69 pct for a 15-year fixed rate loan, the lowest since the WWII. Mortgage applications for new home purchases have risen by 80 pct over the past five quarters, a 64 pct annualized rate of growth.
"Unless the lion’s share of them is being rejected, the outlook for sales and starts has to be good," DBS said in a research note.
New home sales have been trending north at a 12 pct annualized pace but in a stop-start fashion. Further, this trend is also being noticed for housing starts, which is due today.
Markets expect only a 3 pct rise in April, which wouldn’t offset much of the 8 pct drop in March. Mortgage applications reveal that markets are too conservative.