US mortgage applications fall with rising rates

ISTANBUL

US mortgage applications fell last week with rising mortgage rates, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The market composite index, a measure of mortgage loan application volume, decreased 1.6% on a seasonally adjusted basis for the week ending March 15. On an unadjusted basis, the index declined 1% compared with the previous week.

"Mortgage rates increased last week as incoming data showed inflation was still hotter than expected, which stoked concerns about the timing and extent to which the Fed might be able to reduce the fed funds rates this year," Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

"Mortgage applications continued to show sensitivity to rate movements, and both purchase and refinance activity decreased over the week. With housing supply low and prices high, the average loan size for purchase applications increased to the highest level since May 2022," he added.

The average contract interest rate for a 30-year fixed mortgage rate was up to 6.97% from 6.77% the previous week.

The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, rose to 6.49% from 6.37%.

The MBA survey covers more than 75% of US retail residential mortgage applications.