US mortgage applications rise as rates fall to lowest since April

Although downward move in rates benefits prospective homebuyers, mortgage rates still much higher than a year ago, says economist

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications increased last week, as mortgage rates declined to their lowest level since April, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, rose 0.5% on a seasonally adjusted basis for the week ending May 10. On an unadjusted basis, the index increased 0.3% compared to the previous week.

"Treasury yields continued to move lower last week and mortgage rates declined for the second week in a row," Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

"While the downward move in rates benefits prospective homebuyers, mortgage rates are still much higher than they were a year ago, while for-sale inventory remains tight," he added.

The average contract interest rate for a 30-year fixed mortgage rate fell 10 basis points to 7.08%, the lowest since early April, from 7.18% the week before.

The rate for 15-year fixed-rate mortgages, on the other hand, slightly increased to 6.61% from 6.6%.

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

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