US mortgage applications fall 1% as rates hover at 23-year high

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell last week as mortgage interest rates rose further to hover around their highest level in 23 years, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, fell 1% on a seasonally adjusted basis for the week ending Oct. 20 compared to the previous week. On an unadjusted basis, the index also declined 1%.

"Ten-year Treasury yields climbed higher last week, as global investors remained concerned about the prospect for higher-for-longer rates and burgeoning fiscal deficits," MBA Vice President and Deputy Chief Economist Joel Kan said in a statement.

"Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995. These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity," he added.

The 30-year fixed mortgage rate increased 20 basis points to reach 7.9%, still at the highest since 2000, while rates have now risen seven consecutive weeks at a cumulative amount of 69 basis points, according to Kan.

The average contract interest rate for a 15-year fixed-rate mortgage increased to 7.08% from 6.98%.

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