Mortgage demand drops to new low as 30-year fixed interest rates average 7.15%
The S&P 500 rebounded from its 2022 lows this week as investors digested a mixed bag of corporate earnings reports.
The yield on 10-year U.S. Treasury bonds hit 4.337% on Friday, its highest level in 14 years. Treasury yields backed off their highs to close out the week following a Wall Street Journal report that some Federal Reserve officials are growing uneasy with the pace of the central bank's interest rate hikes.
With interest rates soaring, the Mortgage Bankers Association reported Wednesday that U.S. mortgage demand has dropped to a 25-year low. The average rate for a 30-year fixed-rate mortgage has risen to 7.15%, its highest level since 2002.
U.K. Prime Minister Liz Truss resigned on Thursday after just a month and a half on the job. Truss' fiscal plan, which included aggressive tax cuts and investment incentives, sent the British pound tumbling to a record low against the U.S. dollar and created extreme volatility in financial markets, prompting her to reverse course and ultimately step down from her position.
The Washington Post reported Friday that influential Tesla CEO Elon Musk is planning to lay off 75% of Twitter's workforce once he completes his $44-billion acquisition of the social media platform. The same day, Bloomberg reported the Biden administration is considering a review of Musk's Starlink satellite internet service and his Twitter buyout deal on national security grounds.
Cold snap
Shares of Snapchat parent company Snap traded lower by 31% on Friday after the social media company reported just 6% revenue growth in the third quarter, down from 57% growth in the same quarter a year ago.
In the week ahead, investors will get more quarterly reports from big tech companies Alphabet on Tuesday, Meta Platforms on Wednesday and Apple and Amazon on Thursday.
The S&P 500's forward price-to-earnings ratio is currently 15.5, below its 10-year average of 17.1, according to FactSet.
Economic numbers
Investors will get key economic updates on Thursday when the European Central Bank releases its latest interest rate decision and accompanying commentary and the Bureau of Economic Analysis releases its preliminary U.S. GDP growth estimate for the third quarter.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Mortgage demand drops to new low, 30-year interest rates average 7.15%
