US mortgage applications fall 5.6% with rate still above 7%

‘The lack of existing inventory is the primary constraint to increases in purchase volume,’ says economist

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell more than 5% last week as the 30-year fixed mortgage rate remained above 7%, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The market composite index, a measure of mortgage loan application volume, declined 5.6% on a seasonally adjusted basis for the week ending Feb. 23.

"Higher rates in recent weeks have stalled activity," Mike Fratantoni, MBA’s chief economist, said in a statement. "The lack of existing inventory is the primary constraint to increases in purchase volume.”

The average contract interest rate for a 30-year fixed mortgage rate was down to 7.04%, from 7.06% the previous week when it recorded its highest since early December.

The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, increased to 6.7% from 6.61%.

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

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