U.S. mortgage rates drop to 11-month low

Odaily Planet Daily News U.S. mortgage rates fell to their lowest level in nearly a year last week, spurring a surge in refinancing activity and prompting potential home buyers to start entering the market. The interest rate for the 30-year fixed mortgage contract fell 15 basis points to 6.49% in the week ended September 5, according to data released by the American Mortgage Banking Association (MBA). Interest rates on 15-year fixed-rate loans and five-year adjustable loans also fell to their lowest levels in about a year. The decline is enough to drive the MBA’s mortgage activity index, which covers home purchases and refinancing, to its highest point in three years. If financing costs continue to decline, it will provide much-needed support for the weak real estate market. Housing construction has been a weak link in the U.S. economy – four of the past five quarters have posed a drag on GDP. The MBA's home purchases index rose 6.6%, reaching its highest level since the first week of July. The refinancing indicators rose by more than 12%, reaching the highest level in nearly a year. (Jin Shi)