Finance

Mortgage rates dropped this week, but mortgage applications also declined

Published

7 months ago

April 1, 2024

Business Finance News

Mortgage rates dropped to 6.79% for 30-year mortgages. (iStock)

Mortgage rates continued their slight decline this week, Freddie Mac reported. For 30-year fixed-rate mortgages, the average interest rate is 6.79%, down from last week’s average of 6.87%.

Last year at this time, mortgage rates for 30-year mortgages averaged closer to the bottom of the 6% range at 6.35%.

“Mortgage rates moved slightly lower this week, providing a bit more room in the budgets of some prospective homebuyers,” Sam Khater, Freddie Mac’s Chief Economist, said.

“We also are seeing encouraging data on existing home sales, which reflects improving inventory. Regardless, rates remain elevated near seven percent as markets watch for signs of cooling inflation, hoping that rates will come down further.”

For 15-year mortgages, rates have also dropped since last week and now average 6.11% for fixed-rate mortgages. This is higher than last year’s average of 5.56%.

If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible where you can compare rates and lenders with a click of a button.

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Mortgage applications stalled this week

While rates are dropping, buyers aren’t yet fully committed to buying. Mortgage applications decreased 0.7% from a week earlier, according to the Mortgage Bankers Association’s (MBA) weekly survey.

Compared to a year ago, MBA’s unadjusted Purchase Index was 16% lower, signaling a struggle to keep buyers in the market.

“Mortgage application activity was muted last week despite slightly lower mortgage rates. The 30-year fixed rate edged lower…but that was not enough to stimulate borrower demand,” Joel Kan, the MBA’s vice president and deputy chief economist, said.

“Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market.”

Earlier in the year, it was predicted that rates would finally drop below 6%, which is now unlikely at this point.

“Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually… Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances,” Kan said.

Looking to get a mortgage? Credible can help you compare multiple mortgage lenders at once.

HOMEBUYERS GAINED THOUSANDS OF DOLLARS AS MORTGAGE INTEREST RATES FALL: REDFIN

It’s cheaper to rent than buy in all 50 major metro areas in the U.S.

It’s officially become cheaper to rent than to buy in many of the country’s major metro areas. A recent report from Realtor.com revealed that a starter home is more affordable than buying one in the 50 largest metros.

In February 2024, the average monthly cost of buying a starter home was $1,027, which is 60.1% higher than the average cost of renting.

Although the rental market appears hot, the U.S. median rent declined year-over-year, according to Realtor.com. For studio to two-bedroom units, rent declined 0.4% within the top 50 metros. This is the seventh month in a row that rent has declined.

One of the top markets where it’s more affordable to rent is in Austin, Texas. The cost of buying a home in Austin averaged $3,695 per month, 141.5% more than the average monthly rent. Renting in Austin costs $1,530 per month, on average.

Seattle is another area where buying is more expensive than renting. The average cost to buy is $4,422 while the average renter pays $2,000 per month.

If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders and get a pre-approval letter in minutes.

HIGH HOMEOWNERS INSURANCE RATES SCARING AWAY FLORIDA HOMEBUYERS, OTHER STATES FACE THE SAME ISSUE

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Finance

China’s Alibaba claims AI translation tool beats Google, ChatGPT

Published

9 hours ago

October 16, 2024

Business Finance News

Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.

Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.

That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.

Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.

The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.

“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.

Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.

Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.

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Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.

When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.

Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.

Contextual clues

Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.

Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.

His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.

“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.

Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.

That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.

The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.

Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.