The volume of mortgage applications fell again, despite the reduction in interest rates on home loans. Data from the Mortgage Bankers Association (MBA) revealed this trend on Wednesday. For the week ending March 22, mortgage applications were 0.7% lower than the previous week. This is the second week in a row that mortgage applications have been rejected.

Joel Kahn, MBA vice president and deputy chief economist, noted that homebuyers are waiting for mortgage rates to drop further and more homes to come on the market. He predicts that lower rates will eventually lead to more inventory becoming available, but this change is expected to happen gradually. Kahn predicts rates are likely to rise 6% by the end of the year.

The drop in the 30-year fixed mortgage rate to 6.93% didn’t entice potential homebuyers to apply for mortgages. Both homebuyer and refinance loan applications were lower last week, with the purchase index being 16% lower compared to the same week last year. Despite this trend, Kahn believes that there may be some positive news on the horizon as he predicts that as more homes become available on the market, it will increase demand for mortgages and drive down interest rates even further, which could ultimately lead to a rebound in mortgage applications.

By Samantha Johnson

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