(Bloomberg) -- US mortgage rates dropped to the lowest level since mid-October and spurred a financing flurry for home purchases during the week that included the Thanksgiving holiday.
The contract rate on a 30-year mortgage decreased 17 basis points, the biggest weekly slide since August, to 6.69% in the week ended Nov. 29, according to Mortgage Bankers Association data released Wednesday.
The group’s index of home purchase applications advanced a seasonally adjusted 5.6% to the highest level since the start of the year. The figures are prone to wide swings around the year-end holidays, evidenced by a roughly 18% jump over the past two weeks.
Mortgage rates track Treasury yields, which have declined in recent weeks in anticipation that the Federal Reserve will gradually lower its benchmark rate. Odds have improved slightly that officials will follow through with a third straight reduction in borrowing costs at their Dec. 17-18 meeting, though several policymakers are keeping their options open.
MBA’s gauge of refinancing dropped for the ninth week in the last 10 to the lowest level since May.
The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.
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