Mortgage applications in US decline as rates rise for first time in 4 weeks
Date
5/30/2024 3:29:20 AM
(MENAFN) Last week, the Mortgage Bankers Association (MBA) released its latest report indicating a notable decrease in US mortgage applications. This decline, as outlined in the report released on Wednesday, was attributed to a concurrent rise in mortgage rates, marking the first increase in four weeks.
Joel Kan, the MBA’s vice president and deputy chief economist, highlighted this trend, noting that the uptick in rates contributed to a 5.7 percent decline in the market composite index, a key measure of mortgage loan application volume, on a seasonally adjusted basis for the week ending May 24. On an unadjusted basis, the index dropped by 6.3 percent compared to the previous week.
Kan further elaborated on the impact of these rate changes, emphasizing their effect on both purchase and refinance applications, which fell accordingly. This downturn in activity has driven overall mortgage application levels to their lowest point since early March.
The sensitivity of borrowers to even slight increases in rates has particularly impacted the refinance market, while purchase applications continue to lag behind last year’s figures. Kan pointed out the ongoing challenge of limited existing homes for sale, leaving many potential buyers struggling to find listings within their budget that meet their requirements.
In terms of specific rate movements, the average contract interest rate for 30-year fixed-rate mortgages experienced a slight uptick to 7.05 percent, up from 7.01 percent the previous week, which had marked its lowest level in seven weeks. Similarly, the rate for 15-year fixed-rate mortgages saw an increase, rising to 6.66 percent from 6.42 percent during the same period.
The MBA’s survey, which covers more than 75 percent of US retail residential mortgage applications, provides valuable insights into the evolving trends and challenges within the housing finance market.
MENAFN30052024000045015839ID1108274666
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.