Ovunc Kutlu
June 07, 2023•Update: June 07, 2023
ISTANBUL
Mortgage applications in the US fell last week despite a decline in mortgage rates, according to a report Wednesday by the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, dropped 1.4% on a seasonally adjusted basis for the week ending June 2, compared to the previous week. On an unadjusted basis, the index plummeted 12%.
The 30-year fixed mortgage rate declined to 6.81% -- down 10 basis points from 6.91% the previous week that was recorded as the highest of 2023.
"Overall applications were more than 30 percent lower than a year ago, as borrowers continue to grapple with the higher rate environment," MBA Vice President and Deputy Chief Economist Joel Kan said in a statement.
"Purchase activity is constrained by reduced purchasing power from higher rates and the ongoing lack of for-sale inventory in the market, while there continues to be very little rate incentive for refinance borrowers," he added.
The average contract interest rate for a 15-year fixed-rate mortgage also posted a decrease, falling to 6.25%, from 6.41% for the week.
The MBA survey covers more than 75% of US retail residential mortgage applications.
