Homebuyers Hold Off on Purchases as Mortgage Applications Continue to Drop Despite Falling Interest Rates

Lower Rates Fail to Tempt Potential Homebuyers This Week

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

According to Joel Kan, MBA vice president and deputy chief economist, 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%.

Both loan applications for home purchases and refinancing were lower, with the Purchase Index showing a 16% decrease compared to the same week a year ago. 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 the decline in mortgage applications, there is optimism surrounding the potential for increased inventory and affordability in the housing market as homebuyers continue to wait for better conditions before making a purchase.

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