Mortgage interest rates are at the lowest level since last November, but not quite at the lows of last year. That is part of why mortgage volume is weakening. The other factor is a shrinking number of sales as potential buyers struggle to find and afford their dream homes.



Total mortgage application volume decreased 2.3 percent on a seasonally adjusted basis last week, compared with the previous week, according to the Mortgage Bankers Association. Applications are now down nearly 25 percent compared with a year ago, largely due to the lack of homeowners refinancing their loans.



Applications to refinance fell 2 percent for the week and are down 41 percent from a year ago.



The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less decreased to 4.11 percent from 4.12 percent, marking its lowest level since November 2016. Points rose to 0.43 from 0.39, including the origination fee, for 80 percent loan-to-value ratio loans.



"Mortgage rates generally fell, but not as low as they had in 2016," said Joel Kan, an MBA economist. "Borrowers potentially looking at a refinance might be waiting for a much bigger decrease in order to act."



Mortgage applications to purchase a home fell 3 percent for the week and are just 4 percent higher than one year ago. Annual gains in purchase applications are still positive, but they are shrinking. This is because the supply of homes for sale is falling, making it harder for buyers to find and afford a home. Home prices in June reached a new high nationally on the S&P CoreLogic Case-Shiller home price index.



Mortgage rates fell last week on tensions surrounding North Korea, and they are now marching lower again after the leaders of that nation launched a missile that crossed over Japan. Mortgage numbers last week were not impacted by Hurricane Harvey, as it made landfall only late Friday.