US mortgage applications fall 7.7% as rate rises first time in 6 weeks

30-year fixed mortgage increases to 6.39% -- 1st gain after 5 consecutive weeks of decline

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications showed a weekly decline of 7.7%, while the 30-year fixed rate rose for the first time in six weeks, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, fell 7.7% on a seasonally adjusted basis for the week ending Feb. 10, compared to the previous week. On an unadjusted basis, the index fell 7% from the previous week.

The 30-year fixed mortgage rose 21 basis points to 6.39% -- its first gain after five consecutive weeks of decline.

"Refinance borrowers, both rate/term and cash-out, remain on the sidelines as current rates provide little financial incentive to act," MBA Vice President and Deputy Chief Economist Joel Kan said in a report.

"Purchase applications dropped to their lowest level since the beginning of this year and were more than 40 percent lower than a year ago. Potential buyers remain quite sensitive to the current level of mortgage rates," he added.

The average contract interest rate for 15-year fixed-rate mortgages rose to 5.85% from 5.64% for the week.

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

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