Mortgage rates declined slightly last week, but the drop wasn't enough to entice more home owners and buyers to lock them in. Total mortgage applications — including for refinancings and home purchases — dropped 3.5 percent last week on a seasonally adjusted basis compared to the previous week, the Mortgage Bankers Association reports. Refinance applications alone fell 4 percent last week but are still nearly 56 percent higher than a year ago. Applications for home purchases, which are viewed as a gauge of future homebuying activity, decreased 2 percent last week but remain 6 percent higher than a year ago. "Purchase-application volume continues to run ahead of last year's pace, but after growing quite strongly in the first half of the year, the rate of improvement has decelerated this summer," says Lynn Fisher, the MBA's vice president of research and economics. MBA reported the average on the 30-year fixed-rate mortgage dropped to 3.67 percent last week compared to 3.69 percent the week prior. "With 10-year yields ending the day near 1.55 percent, rates are essentially threatening to move higher," noted Matthew Graham, chief operating officer of Mortgage News Daily. "The next three days bring a series of important economic reports that could act as motivation for such a move, if they turn out to be stronger than expected."

Source: CNBC