By Ovunc Kutlu
ISTANBUL (AA) - US mortgage applications fell last week as the 30-year mortgage rate climbed back above 7%, according to a report Wednesday by the Mortgage Bankers Association (MBA).
The market composite index, a measure of mortgage loan application volume, plummeted 10.6% on a seasonally adjusted basis for the week ending Feb. 16.
"Mortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near term rate cut," Mike Fratantoni, MBA’s chief economist, said in a statement.
The average contract interest rate for 30-year fixed mortgage rate was up to 7.06%, from 6.87% the previous week and recorded its highest since early December 2023.
"Mortgage applications dropped as a result with a larger decline in refinance applications," said Fratantoni. "Potential homebuyers are quite sensitive to these rate changes, as affordability is strained with both higher rates and higher home values in this supply-constrained market."
The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, increased to 6.61% from 6.53%.
The MBA survey covers more than 75% of US retail residential mortgage applications.