US mortgage applications rise as rates fall to 4-month low

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications increased last week as rates fell to their lowest level in four months, according to a Mortgage Bankers Association (MBA) report released on Wednesday.

The market composite index, a measure of mortgage loan application volume, rose 3.9% on a seasonally adjusted basis for the week ending July 12. On an unadjusted basis the index soared 30% compared to the previous week.

"Mortgage rates declined last week, as recent signs of cooling inflation and the increased likelihood of Fed rate cuts later this year pulled them lower," Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

"Application activity was up 4 percent, driven by a 15 percent jump in refinances to the highest level since August 2022," he added.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.87%, from 7% the previous week, and marked the lowest level since March this year.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances, which are greater than $766,550, fell to 7.07% from 7.13%.

The rate for 15-year fixed-rate mortgages, meanwhile, declined to 6.49% from 6.63% during that period.

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