US mortgage applications jump 6.3% as 30-year rate declines

By Ovunc Kutlu

ISTANBUL (AA) - Mortgage applications in the US jumped 6.3% on a weekly basis, as the 30-year mortgage rate fell slightly to 6.48%, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The 30-year fixed mortgage rate in the US decreased to 6.48% for the week ending May 5, down from 6.5% in the previous week. It stood at 6.55% for the week ending April 21 -- its highest in more than a month.

The Market Composite Index, a measure of mortgage loan application volume, jumped 6.3% on a seasonally adjusted basis for the week ending May 5, compared to the previous week. On an unadjusted basis, the index soared 7%.

"Mortgage applications responded positively to a drop in rates last week, as the Fed signaled a potential pause at the current level for the federal funds rate in anticipation of inflation slowing and tightening financial conditions that will slow economic and job growth," said MBA's Chief Economist Vice President and Deputy Chief Economist Joel Kan.

"Lower rates from week to week have helped buyers in the market, but limited for-sale inventory remains a challenge for many homebuyers," he added.

The average contract interest rate for a 15-year fixed-rate mortgage decreased to 5.91%, from 6.01%, for the week.

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