The slow economic growth that sparked the recent rallies in the bond market is also tempering housing demand, economists say. As a result, only a minor and short-lived gain in mortgage volume is expected. And the consensus is that rates should float back up for the balance of the year.

Lenders, inured to volatility in interest rates because of the rough ride over the last few years, were cautious about the impact of slightly lower rates and most said they expected the present moderate pace of originations to continue.

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