Mortgage applications in US drop by 10 percent as 30-year mortgage surges above 7 percent
Date
2/22/2024 2:39:02 AM
(MENAFN) According to a report released Wednesday by the Mortgage Bankers Association (MBA), mortgage applications in the United States experienced a decline last week, coinciding with a resurgence in the 30-year mortgage rate, which climbed back above 7 percent.
The market composite index, which serves as a gauge of mortgage loan application volume, witnessed a substantial drop of 10.6 percent on a seasonally adjusted basis for the week ending February 16th.
"Mortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near term rate cut," in a statement, Mike Fratantoni, the chief economist at the Mortgage Bankers Association (MBA), remarked.
The average contract interest rate for a 30-year fixed mortgage increased to 7.06 percent, marking a rise from 6.87 percent the previous week and reaching its highest level since early December 2023.
"Mortgage applications dropped as a result with a larger decline in refinance applications," stated Fratantoni. "Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market."
Meanwhile, the average contract interest rate for 15-year fixed-rate mortgages rose to 6.61 percent from 6.53 percent.
It's important to note that the MBA survey encompasses over 75 percent of US retail residential mortgage applications.
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