Mortgage Applications Falter Even as Interest Rates Drop, Signaling a Slower Housing Market Recovery

Lower Rates Fail to Tempt Potential Homebuyers This Week

Mortgage applications decreased last week even as interest rates on home loans were dropping, according to data from the Mortgage Bankers Association (MBA). The volume of mortgage applications was down by 0.7% for the week ending March 22, marking the second consecutive week of declines.

Joel Kan, MBA vice president and deputy chief economist, mentioned that homebuyers are waiting for mortgage rates to decrease further and for more homes to become available on the market. This drop in applications occurred despite a decrease in the 30-year fixed mortgage rate to 6.93%. The Purchase Index showed a 16% decrease compared to the same week a year ago.

Kan also noted that the gradual reduction in mortgage rates may lead to rates moving closer to 6% by the end of the year, which could further impact the housing market. Despite this decline in mortgage applications, there is optimism surrounding the potential for increased inventory and affordability in the housing market.

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