As interest rates rose, mortgage applications decreased 9.8% in the week that ended March 5, the Mortgage Bankers Association said Wednesday.

"It's clear the market has peaked," said Mark Zandi, chief economist with Regional Financial Associates in West Chester, Pa. "At the very least it means job growth in the mortgage banking industry will soon come to a halt."

For the second week in a row, the average interest rate for a 30-year, fixed-rate mortgage was above 7%. If rates rise another quarter of a point, he said, "it will result in layoffs, because the industry is geared up for very high volume."

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