US mortgage applications rise as rates fall to 7-week low

WASHINGTON (AA): US mortgage applications increased last week, as mortgage rates declined to their lowest in seven weeks, according to a Mortgage Bankers Association (MBA) report released Wednesday.

The market composite index, a measure of mortgage loan application volume, rose 1.9% on a seasonally adjusted basis for the week ending May 17. On an unadjusted basis, the index increased 1.1% compared to the previous week.

“Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement.

“Purchase activity continues to lag despite this recent decline in rates, down 11 percent from a year ago, as potential buyers still face limited for-sale inventory and high list prices,” he added.

The average contract interest rate for 30-year fixed-rate mortgages fell to 7.01%, from 7.08% the previous week.

The rate for 15-year fixed-rate mortgages, meanwhile, decreased to 6.42% from 6.61% during that period.

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