*The interest rate for mortgage loans in the United States reached a 23-year high.
*In a round of secret ballots, Republicans have chosen Mike Johnson as their candidate for the position of Speaker of the House of Representatives, with 128 votes. Today, the vote for the speakership will take place, although it´s uncertain whether he will secure the necessary 217 votes.
*The Israeli military has escalated aerial attacks in the southern Gaza Strip. Meanwhile, world leaders are calling for a ceasefire and the entry of aid into the area.
*According to Chinese official media, President Xi Jinping of China stated that his country is willing to cooperate with the United States to work together and address “global challenges.”
*In addition, the Pentagon reported that China has launched its first nuclear-powered guided-missile submarines, giving them the capability to launch attacks on land and sea, a capacity previously exclusive to US and Russian vessels.
The mortgage interest rate in the United States continued its upward trend and reached a 30-year high. After stringing together seven consecutive weeks of increases for a cumulative 69 base points hike, the average 30-year mortgage interest rate for loan balances under $726,000 reached 7.9% on the week ending on October 20th, the highest level observed since September 2000. This movement is primarily a response to the monetary stance adopted by the Federal Reserve, as well as the expectation that the federal funds rate would remain elevated for a longer period of time. Additionally, the average rate for 5/1 adjustable-rate loans – fixed for the first five years and variable for the remainder of the period – increased to 6.99%. Due to the high financing rates, mortgage applications fell by 1.0% in the week of October 20th, which was preceded by a 6.9% contraction in the previous week, marking the worst record in six months according to data from the Mortgage Bankers Association (MBA). Applications filled to purchase a new home decreased by 2.2% week-on-week. Consequently, the index measuring demand in the mortgage market fell to its lowest level since 1995. Overall, this morning’s figures show how the Federal Reserve’s restrictive cycle has had a definitive impact on the American housing market, discouraging buyers from acquiring new homes and causing property owners to refrain from listing their properties on the market, as indicated by the MBA purchase index, which, similar to the mortgage index, also fell to its lowest level since 1995. However, applications to refinance existing loans did increase by 1.8% week-on-week.