By Ovunc Kutlu
ISTANBUL (AA) - US mortgage applications plummeted 7.2% last week despite 30-year mortgage rates remaining steady, according to a report Wednesday by the Mortgage Bankers Association (MBA).
The market composite index, a measure of mortgage loan application volume, dove 7.2% on a seasonally adjusted basis for the week ending Jan. 26.
"Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity," Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.
"Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity," he added.
The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 6.78% last week, but still lower than the most recent peak of 7.9% recorded in October.
The average contract interest rate for 15-year fixed-rate mortgages, on the other hand, increased to 6.34% from 6.31%.
The MBA survey covers more than 75% of US retail residential mortgage applications.