Mortgage rates drop, but homebuyers still face affordability challenges.

Mortgage rates have declined, leading to an increase in both mortgage and refinance applications from the previous week. However, applications are still lower than last year's levels. Home prices have increased in 7 out of 10 metros in the first quarter of 2023. Elevated mortgage rates and economic uncertainty have caused some buyers to stay out of the market, while low inventory levels have also contributed to the subdued spring market. Homeowners with sub-3% mortgage rates are not willing to list their homes until rates drop below 6%.