US Mortgage Applications Fall Despite Rates Below 7%

US mortgage applications fell last week despite mortgage rates remained below 7%, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The market composite index, a measure of mortgage loan application volume, decreased 0.7% on a seasonally adjusted basis for the week ending March 22. On an unadjusted basis, the index declined 0.4% compared with the previous week.

"Mortgage application activity was muted last week despite slightly lower mortgage rates," Joel Kan, MBA's vice president and deputy chief economist, said in a statement. "Purchase applications were essentially unchanged, as homebuyers continue to hold out for lower mortgage rates and for more listings to hit the market."

The average contract interest rate for a 30-year fixed mortgage rate was down to 6.93% last week, from 6.97% during the previous week.

The average contract interest rate for 15-year fixed-rate mortgages, meanwhile, declined to 6.46% from 6.49% during that period.

"Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually, as we forecast that rates will move toward 6-percent by the end of the year. Similarly, with rates remaining elevated, there is very little incentive right now for rate/term refinances." Kan added.

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