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Merchandising Margin Index (MMI) dipped to a 17-month low of 3.62% in December 2024, marking a consecutive 7-month decline.

Market IntelThursday, Jan 16, 2025 8:11 am ET

1min read

According to the latest data from the research department of the CML mortgage brokerage, the CML mortgage interest rate index (MMI) in December 2024, which reflects the actual mortgage interest rate that new customers can generally achieve, fell 16 basis points to 3.62% month-on-month, falling for seven consecutive months and hitting a new low in 17 months.

CML mortgage brokerage's chief vice-president, Mr. Cao De Ming, said that the actual interest rate of H mortgage has been at the top since the high HIBOR in the past year, but it fell month-on-month in December due to the 1/4 percentage point cut in the most preferred interest rate (P) by Hong Kong banks in November. With the third cut of 1/8 percentage point in the most preferred interest rate by Hong Kong banks in December, the new mortgage interest rate of banks in general has further dropped to the 3.5% level, and the MMI is expected to have more room for decline.

Cao De Ming added that the core consumer price index (CPI) in the United States in December 2023 was 3.2%, lower than market expectations, and brought a boost to the expectation of interest rate cuts. However, the overall CPI rose 0.2% month-on-month to 2.9%, up for three consecutive months, and the US employment data remained strong, with the latest unemployment rate falling 0.1 percentage point to 4.1%, so the Federal Reserve will consider the inflation trend and overall economic environment to decide the pace of interest rate cuts this year.

On the Hong Kong side, the one-month HIBOR today was 3.92%, falling for seven consecutive working days, hitting a new low of 3.74% on September 23, 2023, the lowest in nearly four months, and Cao De Ming expects the one-month HIBOR to continue to fluctuate between 3.5% and 4% in the first quarter. If the US cuts interest rates this year, Hong Kong banks will also adjust interest rates according to their own business strategies, and it is not ruled out that they will follow the cut in the most preferred interest rate (P).

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