Global mortgage markets see shifts in lending and interest rates

Residential mortgage lending is experiencing shifts in both Australia and the United States. In Australia, total new residential lending fell 5 percent to $97.6 billion in the June quarter, marking the first back-to-back quarterly decline in over three years. This contraction was driven largely by a retreat in investor lending, which dropped 10 percent to $37.1 billion. The $4.2 billion decrease in investor capital represents the sharpest single-quarter decline for this sector since 2015, attributed to rising interest rates and property tax changes.

In the United States, mortgage rates have declined for two consecutive weeks. The 30-year conforming rate averaged 6.86%, while 30-year FHA loans averaged 6.59%. This downward trend led to a 3.6% increase in mortgage applications, with both purchase and refinance indices seeing growth. Despite the slight relief in rates, affordability remains a challenge, and there are rising levels of stress in mortgage servicing portfolios, particularly regarding government-backed loans.