Would-be homebuyers have faced painful mortgage rates for years now, so the downward shift is a silver lining for the flailing
“Mortgage rates decreased across the board last week and mortgage application volume reached its highest level since January of this year,” said Joel Kan, MBA’s vice president and deputy chief economist. “Despite the downward movement in rates, purchase activity only saw small gains, with an increase in conventional purchase applications offset by decreases in government purchase applications.
The recent decline in mortgage rates comes after they peaked this year at about 7.40% in April. They have gradually slid lower since then as the Federal Reserve eyes its first interest rate cuts. The report also triggered a recession indicator called the Sahm rule. That is when the three-month moving average of the unemployment rate rises half a percentage point relative to its minimum point over the past year. The indicator has signaled the start of all post-war recessions.