US mortgage applications jump 7.4% as rates fall to lowest since July

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications continued to rise last week as mortgage interest rates kept falling, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, jumped 7.4% on a seasonally adjusted basis for the week ending Dec. 8, compared to the previous week. On an unadjusted basis, the index increased 6% compared to the previous week.

"Mortgage rates dropped last week, as incoming data point to a slowing economy and support a pivot by the Federal Reserve to begin cutting rates next year," MBA Chief Economist Mike Fratantoni said in a statement. "Borrowers who had seen rates near 8 percent earlier this fall are now seeing some lenders quote rates below 7 percent."

"Purchase volume was running about 18 percent below last year’s pace, as prospective homebuyers are still challenged by a lack of inventory, even as rates have decreased," he noted.

The 30-year fixed mortgage rate fell to 7.07% last week, from 7.17% the previous week, to its lowest since July. That rate plummeted 25 basis points for the week ending Nov. 3, recording its largest single-week decline since July 2022.

The average contract interest rate for a 15-year fixed-rate mortgage fell to 6.67% from 6.8%.

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