US mortgage applications jump 7.2% as rates fall for 2nd week

By Ovunc Kutlu

ISTANBUL (AA) - Mortgage applications in the US jumped last week as mortgage rates fell for the second consecutive week, according to a report on Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, increased 7.2% on a seasonally adjusted basis for the week ending June 2, compared to the previous week. On an unadjusted basis, the index plummeted 12%.

The 30-year fixed mortgage rate declined to 6.81% -- down 10 basis points from 6.91% the previous week that was recorded as the highest of 2023.

"Overall applications were more than 30 percent lower than a year ago, as borrowers continue to grapple with the higher rate environment," MBA Vice President and Deputy Chief Economist Joel Kan said in a statement.

"Purchase activity is constrained by reduced purchasing power from higher rates and the ongoing lack of for-sale inventory in the market, while there continues to be very little rate incentive for refinance borrowers," he added.

The average contract interest rate for a 15-year fixed-rate mortgage also posted a decrease, falling to 6.25%, from 6.41% for the week.

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