Mortgage applications are down because of a combination of rates and prices. Since there is no direct mechanism that lowers prices as rates rise (because houses aren't bonds), and because we lack an impetus for forced selling in mass, we have stagnation for as long as takes the market to adjust. Focusing on the rates sorta misses the fact that they are only prohibitive because they are attached to high prices. And the high prices are because the Fed was buying MBS while we rained down multiple trillions of stimmy checks onto an economy that had half of its consumption choices restricted due to lockdowns as it faced literal all-time low mortgage rates. Then we jacked rates up and locked in a bunch of buyers and refinancers who don't want to sell today because it means they'd have to buy in the same overpriced market. Stagnation marches on.