According to the data of American mortgage giant Freddie Mac at the beginning of the year, the average interest rate of the most popular 30-year mortgage in the United States is 3.22%. By Thursday, the company said that the interest rate had jumped to 4.67%, the highest level since February 20 18. The whole first quarter soared 145 basis points, pushing the mortgage interest rate close to 5% for the first time in four years.
So far, high mortgage interest rates have not completely weakened consumers' housing demand. According to the data of American Mortgage Bankers Association (MBA), the number of applications submitted by potential buyers has increased for three consecutive weeks in the past four weeks.
However, with the passage of time, soaring mortgage interest rates are bound to slow down buying activities and cool down the fiery real estate market. According to MBA data, the availability of mortgage loans, an indicator to measure the willingness of lending institutions to issue housing loans, rose to the highest level since May last year in February, but it is still far below the recent high.
After the outbreak of the epidemic, due to insufficient supply and increased demand, house prices in the United States rose particularly rapidly. With the increase in borrowing costs, first-time buyers in the United States are facing double pressure, and many Americans' hopes of owning a house have become slim.
According to the Atlanta Federal Reserve, according to the median house price of 5438+ 10 in June, American families need to spend 34% of their income on mortgage loans every month, which is the highest level since June 2008 165438+ 10.
In addition, rising mortgage interest rates are reducing the refinancing of housing loans (repaying old loans with new loans). According to data from mortgage data company Black Knight Inc, about 4 million Americans can reduce their monthly payments through refinancing in February, down from nearly 6.5438+0.6 million a year ago. According to MBA data, refinancing is expected to account for 33% of mortgage loans issued this year, which is lower than 59% of 202 1.
Faced with the decline in the number of applications, banks are expanding product supply and relaxing the qualification requirements of some borrowers. They are also trying to attract buyers whose financial situation can't keep up with the increase of median sales price of existing houses 15% in the past year.
Greg McBride, chief financial analyst of Bankrate.com, a loan service company, quoted the Wall Street Journal as saying, "The idea of relaxing requirements at a time when the real estate market is developing rapidly reminds people of 2005 and 2006." But he added that "credit has been significantly tightened".
Related Q&A: Related Q&A: Is there an lpr when calculating the loan interest rate abroad? What is the changing trend? Global observation of LPR interest rate system
There are three formation mechanisms of LPR in the world, that is, most countries in the world conduct interest rates in a way similar to LPR mechanism. Although the banking system is very complicated, we can simply regard bank lending as such a process. The central bank lends money to commercial banks, which lend money to lenders.
The first type: the LPR interest rate formation mechanism represented by the United States, which emphasizes policy transmission. The Fed often raises interest rates and cuts interest rates, so this is the policy target interest rate. According to this interest rate, the Federal Reserve lends to commercial banks, and the interest rate after 1994 forms a mechanism. Commercial banks form LPR interest rates, that is,
LPR interest rate = Fed target interest rate +3%. If American commercial banks lend to users with the best credit, they will follow the LPR interest rate, which is the optimal lending rate. If the user is not the best customer, this is reflected in the fact that the credit rating is not AAA, maybe BB, or lower. Then the loan interest rate of this general credit user =LPR interest rate+term risk interest rate+default risk interest rate. The danger of American rating agencies downgrading the credit ratings of some enterprises is reflected, because once downgraded, the default risk interest rate will increase, and these enterprises will have to spend more loan interest.
The second type: the LPR interest rate formation mechanism formed by the bank financing cost represented by India. India does not determine the LPR interest rate according to the benchmark interest rate, but according to the average cost of commercial banks to obtain funds. Every bank has its own cost of capital. Then add a fixed spread. Of course, after the formation of LPR interest rate, the term risk rate and default risk rate still need to be added to become the actual loan interest rate. This model protects the stability of commercial banks. Commercial banks, on the other hand, have no passion and response because of the fixed spread, and are not active. The market can hardly affect the credit market. When funds are tight, commercial banks simply stop lending. Therefore, in terms of microfinance in India and Bangladesh, the poor can't get loans, and this mechanism is also one of the reasons.
The third type: the formation mechanism of linking LPR interest rate with market interest rate represented by Japan. Negative interest rate in Japan? Yes, but Japan's central bank interest rate can hardly affect the mobility of Japanese society, and inflation is still very low. The reason is that the Japanese banking industry is very superstitious about marketization and the interest rate is completely marketized. Don't misunderstand that America is a market economy. In fact, the United States controls its currency. The interest rate in Japan can also be considered as LPR interest rate+term risk+default risk. Only the LPR interest rate refers to the market interest rate, and the bank quotes itself. Therefore, in essence, Japan's LPR interest rate guidance is only a guide and a reference for banks to guide the tightness of funds. In terms of lending, Japan has the highest degree of marketization. In recent years, large technology companies on Wall Street like to issue yen bonds. On the one hand, the interest rate is low, on the other hand, the degree of marketization is high. Although Japan has negative interest rates, it can still maintain positive returns by issuing yen bonds. Buffett also issued yen bonds some time ago. However, Japan's disadvantage is that commercial banks compete to the death.
Formation mechanism of LPR in China. China's LPR is a balance between market and policy. It is neither fully policy-oriented America and India nor fully market-oriented Japan. At present, China's LPR interest rate refers to the medium-term convenience tool MLF, that is, the interest rate level of 1 year issued by the central bank to commercial banks. At the same time, 18 commercial banks will still quote. Some time ago, the interest rate of convenience tools dropped from 3.3% to 3.25%, and the interest rate of LPR dropped from 4.3% to 4. 15%. It can be seen that the changes are not synchronized, which refers to market factors and policy transmission.