Mortgage applications in US see increase as rates drop for 5th consecutive week
(MENAFN) US mortgage applications saw a rise last week as mortgage rates continued their downward trend for the fifth consecutive week, according to a report by the Mortgage Bankers Association (MBA) released on Wednesday. The market composite index, which tracks the volume of mortgage loan applications, increased by 1.6 percent on a seasonally adjusted basis for the week ending August 30. On an unadjusted basis, the index rose by 0.2 percent compared to the previous week, indicating a slight uptick in mortgage application activity.
Purchase applications experienced a notable increase of over 3 percent during the week, edging closer to the levels observed at the same time last year. This uptick was particularly driven by a rise in government purchase applications, highlighting a renewed interest in home buying. Joel Kan, MBA’s vice president and deputy chief economist, noted that this positive trend in purchase applications reflects growing consumer confidence in the housing market.
Refinance applications, while slightly down from the previous week, continued to show robust annual gains. Borrowers who had previously locked in higher rates are taking advantage of the current lower rates to refinance their mortgages, thereby reducing their monthly payments. This trend underscores the ongoing appeal of refinancing amid favorable rate conditions.
The average contract interest rate for 30-year fixed-rate mortgages fell to 6.43 percent from 6.44 percent in the previous week, marking its fifth consecutive weekly decline. In contrast, the rate for 15-year fixed-rate mortgages saw an increase, rising to 5.98 percent from 5.88 percent over the same period. The MBA survey, which encompasses over 75 percent of US retail residential mortgage applications, reflects these shifts in mortgage rate trends and their impact on the application landscape.
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