US mortgage applications fall with rates around 7%

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell last week, as mortgage rates remained around 7%, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, was down 0.2% on a seasonally adjusted basis for the week ending July 5. On an unadjusted basis, however, the index plummeted 20% compared to the previous week.

"The recent uptick in mortgage rates has slowed demand," Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. "Mortgage applications were essentially flat last week, as mortgage rates remained around 7 percent."

"Refinance applications decreased for the fourth consecutive week, in line with higher rates. Although home equity gains have been significant in recent years, most borrowers do not have much of an incentive to refinance at current rates," he added.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 7%, from 7.03% the previous week. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances, which are greater than $766,550, rose to 7.13% from 7.11%.

The rate for 15-year fixed-rate mortgages, meanwhile, climbed to 6.63% from 6.56% during that period.

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