US mortgage applications jump 7.1% with falling rates

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications jumped 7.1% last week with falling mortgage rates, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The market composite index, a measure of mortgage loan application volume, increased 7.1% on a seasonally adjusted basis for the week ending March 8. On an unadjusted basis, the index increased 8% compared with the previous week.

"While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years," Mike Fratantoni, MBA’s chief economist, said in a statement.

The average contract interest rate for a 30-year fixed mortgage rate was down to 6.77%, from 6.86% the previous week.

The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, fell to 6.37% from 6.66%.

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