US mortgage applications fall despite rates remaining steady

Borrowers may be waiting for signs that mortgage rates will drift lower as Fed begins to cut short-term rates, says economist

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell last week, although mortgage rates remained unchanged from previous month, according to a Mortgage Bankers Association (MBA) report that was released Wednesday.

The market composite index, a measure of mortgage loan application volume, was down 3.9% on a seasonally adjusted basis for the week ending July 26. On an unadjusted basis, the index declined 4% compared to the previous week.

"Borrowers may be waiting for signs that mortgage rates will drift lower as the Federal Reserve begins to cut short-term rates," Mike Fratantoni, MBA’s chief economist, said in a statement. "Purchase volume also dropped slightly because of ongoing affordability challenges."

The average contract interest rate for 30-year fixed-rate mortgages remained steady at 6.82% from the previous week.

The rate for 15-year fixed-rate mortgages, on the other hand, rose to 6.27% from 6.21%.

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

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