Mortgage applications in US experience decline of over 5 percent
Date
2/29/2024 4:09:32 AM
(MENAFN) According to a report released on Wednesday by the Mortgage Bankers Association (MBA), mortgage applications in the United States experienced a decline of more than 5 percent last week. This drop comes as the 30-year fixed mortgage rate continues to remain above 7 percent, impacting borrower demand.
The market composite index, which serves as a gauge of mortgage loan application volume, decreased by 5.6 percent on a seasonally adjusted basis for the week ending February 23rd.
"Higher rates in recent weeks have stalled activity," Mike Fratantoni, MBA’s head economist, stated in a declaration. "The lack of existing inventory is the primary constraint to increases in purchase volume.”
In the latest report by the Mortgage Bankers Association (MBA) released on Wednesday, it was noted that the average contract interest rate for a 30-year fixed mortgage showed a slight decrease, dropping to 7.04 percent. This slight decline comes after the rate reached its highest level since early December the previous week, where it stood at 7.06 percent. Despite this decrease, the rate remains elevated, impacting borrower affordability and potentially contributing to the decline in mortgage applications observed during the same period.
Conversely, the average contract interest rate for 15-year fixed-rate mortgages saw an increase, rising to 6.7 percent from 6.61 percent in the preceding week. This uptick in rates for 15-year fixed-rate mortgages further underscores the prevailing trend of rising mortgage rates across various loan products, which could influence borrowers' decisions regarding home financing and refinancing options.
It's worth noting that the MBA survey, which encompasses data from more than 75 percent of US retail residential mortgage applications, provides valuable insights into the trends and dynamics shaping the mortgage market. The survey's comprehensive coverage offers a broad perspective on borrower behavior, lender practices, and overall market sentiment, which in turn, informs industry stakeholders, policymakers, and consumers alike about the state of the housing finance landscape.
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