US mortgage applications rise 7% as rate falls to 4-month low

Mortgage rates decline for 3rd straight week, 30-year fixed rate falls to 6.2% – lowest since last September

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications showed a weekly increase of 7%, while the 30-year fixed rate fell to its lowest level in four months, according to a report released Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, rose 7.0% on a seasonally adjusted basis for the week ending Jan. 20, compared to the previous week. On an unadjusted basis, the index climbed 1.0% compared to the previous week.

The 30-year fixed mortgage rate fell to 6.2% – its lowest level since last September.

"Mortgage rates declined for the third straight week, which is good news for potential homebuyers looking ahead to the spring homebuying season," MBAVice President and Deputy Chief Economist Joel Kan said in a report.

"Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market. Many have been waiting for affordability challenges to subside," he added.

The average contract interest rate for 15-year fixed-rate mortgages fell to 5.54%, from 5.58%, for the week.

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

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