Market sentiment index (MMI) fell slightly to 4.16% in June, with expectations of continuing to trade at high levels in the third quarter

According to the latest data from the Mortgage Market Index (MMI) released by the Mortgage Referral Research Department in June this year, the actual interest rate index for mortgage loans, which reflects the actual interest level that new mortgage customers can generally achieve, has dropped slightly by 1 basis point to 4.16%. The bank pointed out that the Federal Reserve may start cutting interest rates in September, at which time the Hong Kong Interbank Offered Rate (HIBOR) may fall below 4%, but interest rates continue to touch the ceiling. It is expected that the MMI will continue to remain at a high level in the third quarter.

Cao Deming, Vice President of Mortgage Referral, stated that in June, as many as 95% of new mortgage customers chose the Hong Kong Interbank Offered Rate (HIBOR) plan, reflecting a preference for the HIBOR plan among new customers. The average one-month HIBOR rate for banks in June was 4.56%, leading to the actual interest rate and MMI continuing to touch the ceiling.

On August 20th, the one-month HIBOR rate was 4.07%, maintaining a level close to 4% for over 11 and a half months. Cao Deming pointed out that the latest US Consumer Price Index (CPI) in July fell for the fourth consecutive month to 2.9%, reaching a new low since March 2021, close to the Federal Reserve's inflation target of 2%. With the European Central Bank, the Bank of Canada, and the Reserve Bank of New Zealand successively cutting interest rates, and the slowing growth of US employment, coupled with the fact that US interest rates have remained high since July last year for over 12 months, the Federal Reserve has reason to start cutting interest rates in September. At that time, HIBOR may fall below 4%, but interest rates continue to touch the ceiling. It is expected that the MMI will continue to remain at a high level in the third quarter