US mortgage applications fall 3.1% as rates jump to 9-month high

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell 3.1% last week as rates climbed to their highest in nine months, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, fell 3.1% on a seasonally adjusted basis for the week ending Aug. 4, compared to the previous week. On an unadjusted basis, the index declined 4%.

The 30-year fixed mortgage rate jumped from 6.93% to 7.09% -- the highest since November 2022.

"Treasury yields rates rose last week and mortgage rates followed suit due to a combination of the Treasury’s funding announcement and the downgrading of the U.S. government debt rating," MBA Vice President and Deputy Chief Economist Joel Kan said in a statement.

"Not surprisingly, mortgage applications continued to decline given these higher rates, with overall application counts falling for the third consecutive week, as both purchase and refinance activity declined. The purchase index fell for the fourth consecutive week, as homebuyers continue to struggle with low for-sale inventory and elevated mortgage rates," he added.

The average contract interest rate for a 15-year fixed-rate mortgage increased to 6.51%, from 6.39%, for the week.

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