US mortgage applications drop as interest rates rise

Home loan applications in the US have declined, along with an increase in fixed mortgage rates, according to the latest figures released by the Mortgage Bankers Association (MBA).

The MBA’s weekly mortgage applications survey showed that total mortgage applications dropped 5.0 percent in the previous week. Despite a week-on-week decline, the purchase index was 2.2 percent higher than in the same period last year.

Meanwhile, interest rates in fixed mortgages fell slightly, with more mortgage applicants eyeing adjustable-rate mortgages (ARMs). Overall application activity linked with ARMs climbed to 6.1 percent, from 5.8 percent in the previous week.

The MBA said average contract rates for 30-year fixed mortgages stood at 4.5 percent, down from 4.54 percent a week ago, while those for 15-year fixed mortgages stood at 3.67 percent, up slightly from 3.66 percent in the previous week.

It noted that both fixed mortgage products saw a slight increase in average points, with 30-year and 15-year fixed mortgages rising to 1.14 and 1.08 respectively.

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