Homebuyers are pulling away from this summer’s expensive and competitive housing market, even as interest rates settle. Total mortgage application volume fell 4.9 percent, seasonally adjusted, last week compared with the previous week, according to the Mortgage Bankers Association. There were 12 percent fewer applications compared with the same week one year ago.

Applications for mortgages to purchase a home led the decline, falling 6 percent for the week. More new listings are coming on the market this summer, but buyers are bumping up against high prices and multiple offers. Cash buyers often have the upper hand, as sellers would rather not deal with appraisals that might not meet those higher prices.

If June is anything like May, demand is still high, but sales will be lower. A monthly demand index from real estate brokerage Redfin found the same number of people were requesting home tours in May as in April, but the number of buyers making offers fell 16.7 percent year over year.

"People listing their homes for sale in higher numbers this April and May is good news for buyers, and good news for home sales," said Redfin's head of analytics, Pete Ziemkiewicz. "But it's still not enough to satisfy buyer demand, which means price increases will likely continue."