Jingluo: The May MMI reported 2.8%, hitting a low not seen in over two and a half years, and it is expected that the Federal Reserve will still have one opportunity to cut interest rates in the second half of the year
According to data from the Mortgage Referral Research Department of Jingluo, the MMI for May reported 2.8%, hitting a new low in 31 months, with a sharp month-on-month drop of 74 basis points. Over 95% of new customers chose the H plan, and HIBOR fell significantly to 1.47%. Cao Deming stated that the decline in mortgage rates eases the burden of homeownership, providing positive support for the Hong Kong property market. It is expected that the MMI will challenge the level of 2% or below. The Federal Reserve still has one opportunity for a rate cut in the second half of the year
According to the latest data from the Meridian Mortgage Referral Research Department, the Meridian Mortgage Interest Rate Index (MMI) for May, which reflects the actual interest rate level that new mortgage customers can generally achieve, is reported at 2.8%, a sharp month-on-month drop of 74 basis points, reaching a 31-month low.
Cao Deming, Chief Vice President of Meridian Mortgage Referral, stated that over 95% of new Meridian mortgage customers chose the H mortgage plan in May. The Hong Kong Monetary Authority intervened in the market four times in May, raising the banking system's surplus to HKD 174 billion, and the influx of hot money caused HIBOR to drop sharply. The average one-month HIBOR in May was reported at 1.47%, a significant drop of 2.18% compared to April's 3.65%, leading to a substantial decline in the MMI. The current drop in interest rates can alleviate the mortgage burden for property buyers, providing positive support for the Hong Kong property market.
Additionally, today the one-month HIBOR is reported at 0.54%. Based on the common H mortgage plan "H+1.3%", the actual interest rate for H mortgage today is reported at 1.84%, a significant reduction of 1.66% compared to the capped interest rate of 3.5%. Cao Deming pointed out that the recent atmosphere in the new stock market in Hong Kong is very hot, with hot money continuously flowing into Hong Kong. If the demand for the Hong Kong dollar persists, and the banking system's surplus remains above HKD 100 billion, HIBOR may have the opportunity to test 0.5% or below in the short term, and the MMI is expected to challenge the level of 2% or below.
On the other hand, the latest Consumer Price Index (CPI) in the United States for May is reported at 2.4%, slightly higher than April's 2.3%, while the unemployment rate remains steady at 4.2%. The impact of tariffs on inflation is still under observation. Cao Deming believes that the upcoming interest rate decision from the Federal Reserve will remain unchanged, and he expects the Federal Reserve to consider the inflation trend in the coming months. If the situation is controllable, there may still be one opportunity for a rate cut in the second half of the year
