Lower Rates Fail to Tempt Potential Homebuyers This Week

Mortgage Applications Decrease for Second Week in a Row Despite Lower Mortgage Rates

Despite a decrease in the 30-year fixed mortgage rate to 6.93%, the volume of mortgage applications decreased last week by 0.7%. This marks the second consecutive week of declines, according to data from the Mortgage Bankers Association (MBA).

Both home purchase and refinancing loan applications were lower, with the Purchase Index showing a 16% decrease compared to the same week a year ago. Joel Kan, MBA vice president and deputy chief economist, attributed this decline to homebuyers waiting for mortgage rates to decrease further and for more homes to become available on the market. He believes that lower rates will eventually lead to more inventory becoming available as the lock-in effect diminishes.

Kan also noted that while the gradual reduction in mortgage rates may lead to rates moving closer to 6% by the end of the year, it could have an impact on the housing market. However, there is optimism surrounding increased inventory and affordability in the housing market due to this decline in mortgage applications.

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