U.S. mortgage applications drop as rates tick up

WASHINGTON, March 6 (Xinhua) -- Mortgage applications in the United States dropped last week, as Mortgages rates edged up slightly, Mortgage Bankers Association (MBA) said on Wednesday.

For the week ending March 1, MBA's market composite index, a measure of Mortgage loan application volume, decreased 2.5 percent from one week earlier.

"Slightly higher Mortgages rates last week led to a decrease in application volume. Furthermore, the average loan size for purchase applications increased to a record high, led by a rise in the average size of conventional loans," said Mike Fratantoni, senior vice president and chief economist of MBA.

According to Fratantoni, the increase in conventional loans suggested that move-up and higher-end buyers had become a greater share of the spring market.

"Overall, conventional purchase loans are up 2.1 percent relative to last year, indicating that homebuyers continue to be inspired by the stable rate environment and the modest increase in housing supply," said Fratantoni.

MBA's data also showed that the refinance index, a gauge of Mortgage refinance activity in the United States, dropped 2 percent from the previous week. Meanwhile, the purchase index also decreased 3 percent from one week earlier.

Latest data also showed that housing market in the United States expanded much slower in recent years. The U.S. Census Bureau said on Tuesday that sales of newly built, single-family homes posted a yearly gain of 1.5 percent in 2018, which was significantly lower than the over 9 percent yearly increase in 2017 and nearly 12 percent yearly increase in 2016.