Weakening affordability is making potential homebuyers gnash their teeth this summer, and it is taking a real bite out of the mortgage market.

Total mortgage application volume decreased 1.7 percent last week and was 15 percent lower than a year ago, according to the Mortgage Bankers Association's seasonally adjusted report.

A drop in mortgage rates should have given a little life to the mortgage business, but it did not.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.78 percent from 4.81 percent, its lowest rate since the week ending July 20, with points increasing to 0.46 from 0.42 (including the origination fee) for loans with a 20 percent down payment.

"Treasury yields were lower over the week, primarily driven by a release of FOMC minutes showing that Fed officials may be taking a more cautious approach to the final two expected rate hikes of 2018," said Joel Kan, an MBA economist.