Mortgage applications in US drop as rates stabilize around 7 percent
Date
7/11/2024 4:12:27 AM
(MENAFN) According to the Mortgage Bankers Association (MBA) report released on Wednesday, US mortgage applications declined last week as mortgage rates stabilized around 7 percent. The market composite index, which measures mortgage loan application volume, decreased by 0.2 percent on a seasonally adjusted basis for the week ending July 5th. On an unadjusted basis, however, the index saw a substantial drop of 20 percent compared to the previous week.
Joel Kan, MBA's vice president and deputy chief economist, noted that the recent increase in mortgage rates has contributed to the slowdown in demand. He highlighted that mortgage applications were relatively flat, reflecting the ongoing stability in mortgage rates at around 7 percent.
The decline in mortgage applications was particularly evident in refinance activity, which fell for the fourth consecutive week as higher rates diminished incentives for borrowers. Despite significant gains in home equity in recent years, many borrowers currently find limited motivation to refinance at current interest rates.
Specifically, the average contract interest rate for 30-year fixed-rate mortgages dipped slightly to 7 percent from 7.03 percent in the previous week. Conversely, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances, exceeding USD766,550, edged up to 7.13 percent from 7.11 percent. For 15-year fixed-rate mortgages, the average contract interest rate increased to 6.63 percent from 6.56 percent over the same period.
The MBA survey, which covers a significant portion of US retail residential mortgage applications, provides insights into trends and changes in the mortgage market. These figures highlight how mortgage rate movements continue to influence borrower behavior and overall mortgage application volumes in the US housing market.
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