Results for: Mortgage Market

Mortgage demand is plummeting as interest rates continue to climb, leading to fears of a potential housing market crash. Mortgage applications dropped by 2.7% last week, driven by a jump in mortgage rates to 7.24%, the highest level since November. Applications to refinance fell even more dramatically, decreasing by 6% from the previous week. Purchase applications also saw a decrease of 1%, marking a significant 15% decline year-over-year. Despite the falling demand, home prices continue to rise, largely due to the limited inventory of available homes for sale. As a result, analysts believe that a housing market crash is unlikely in the near future.

Treasury yields have witnessed a significant upward trajectory, reaching their highest levels since November 2023. This surge is having a direct impact on the U.S. mortgage market, with rates rising to their highest levels since late 2023. The 30-year fixed mortgage rate has escalated to 7.24%, leading to a decline in mortgage application activity. Meanwhile, the rising yields have amplified concerns about the burgeoning federal deficit, with some analysts expressing worries about its potential to destabilize the market. From a technical standpoint, the monthly chart for 30-year Treasury yields exhibits an ascending channel, suggesting the possibility of further yield increases. Key resistances to watch include 5% and higher, raising the potential for negative returns in bonds.

Lloyds Banking Group’s pre-tax profits have taken a significant hit in the first quarter of 2024 due to increased competition in the mortgage market and rising costs. Despite a 22 percent increase in revenues, profits dropped by 28 percent to £1.6 billion. The decline was attributed to lower mortgage rates, a new Bank of England levy, and severance pay increases following redundancies. However, the bank anticipates easing pressure on its margins in the second half of the year.

Lloyds Banking Group has witnessed a significant 28% drop in its profits during the first three months of the year. The decline, driven by reduced net interest income and fierce competition in the mortgage and savings market, fell below analyst expectations. Despite this, Lloyds remains optimistic about the economy and predicts an improved outlook for the year ahead.