Mortgage Application Volume Declines Despite Low Interest Rates: Homebuyers Hold off on Applying for Mortgages

Despite a decrease in interest rates on home loans, the volume of mortgage applications has dropped again, according to data from the Mortgage Bankers Association (MBA) on Wednesday. For the week ending March 22, mortgage applications were 0.7% lower than the previous week, marking the second consecutive week of decline. The drop in the 30-year fixed mortgage rate to 6.93% did not entice potential homebuyers to apply for mortgages.

Both loan applications for home purchases and refinancing were lower last week, with the Purchase Index decreasing by 16% compared to the same week last year. Joel Kan, MBA vice president and deputy chief economist, noted that homebuyers are waiting for mortgage rates to decrease even further and for more homes to be listed on the market before applying for a mortgage. He anticipates that lower rates will eventually lead to more inventory becoming available, but this change is expected to occur gradually. Kan predicts that rates will likely rise towards 6% by the end of the year.