The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. dropped 2.2 percent in the week ended March 26, following a 2.5 percent decline in the previous week.

According to the report, refinance applications fell 2.5 percent, while applications to purchase a home declined 1.5 percent.

Meanwhile, the average fixed 30-year mortgage rate edged down from 3.36 percent to 3.33 percent, breaking a seven-week rising streak.

“Higher mortgage rates continue to shut down refinance activity, as the pool of borrowers who can benefit from a refinance further shrinks,” noted Joel Kan, an MBA economist.

“Many prospective homebuyers this spring are feeling the effects of higher rates and rapidly accelerating home prices,” Kan added. “Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10% growth rates seen in 2005. The housing market is in desperate need of more inventory to cool price growth and preserve affordability.”