US mortgage rate falls for 4th week, applications decline

By Ovunc Kutlu

ISTANBUL (AA) - The 30-year fixed mortgage rate in the US fell for the fourth consecutive week, while mortgage applications also saw a weekly decline, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.1% on a seasonally adjusted basis for the week ending March 31, compared to the previous week. On an unadjusted basis, the index declined 4% from the previous week.

The 30-year fixed mortgage rate declined to 6.40% last week, still at the lowest level in more than a month. It stood at 6.45% for the week ending March 24 and at 6.48% the week before that.

"Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season," said MBA's Chief Economist Mike Fratantoni. "Additionally, refinance application volume continues to be quite low."

"While we have seen relative weakness at the high end of the housing market in recent months, the divergence in rates suggests that banks may be tightening credit in response to recent challenges, preserving balance sheet capacity as deposit balances have declined," he added.

The average contract interest rate for a 15-year fixed-rate mortgage increased to 5.97%, from 5.84%, for the week.

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