- The volume of U.S. mortgage applications plummeted to the lowest in nearly three decades last week as the interest rate on the most popular type of home loan rose for a sixth straight week to the highest since 2000, the latest data to point to no near-term relief for the slumping housing market.
Mortgage interest rates, which had been around 3% just two years ago, initially climbed on the back of the rate hikes the Federal Reserve kicked off in March 2020 to beat back inflation. More recently, however, they've been pushed higher by bond market activity with the Fed seen as at or near the peak of its tightening cycle.
That would be the slowest sales rate since 2010. In addition to high borrowing costs, sales are being restrained by very low inventory of homes on the market. Economists suspect that homeowners, many of whom have mortgages at much lower rates than are currently available, are reluctant to give up their homes only to have to buy a new one with borrowing costs remaining as high as they are now.
-- A joint venture tied to a Pacific Investment Management Co. fund surrendered a portfolio of 20 hotels with a $240 million mortgage.
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