Homebuyers delay their purchases, hoping for reduced mortgage rates.

• The interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased from 6.87% to 6.82%.
• The number of mortgage applications for purchasing a home decreased by 4% last week compared to the previous week.
• The number of applications to refinance a home loan increased by only 0.3% during the week.

Last week, mortgage interest rates slightly decreased, yet it was not enough to motivate today's potential homebuyers to make a decision.

The interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.82% from 6.87%, with points increasing to 0.59 from 0.57 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association. This is the lowest level since February of this year.

Although mortgage rates have fallen by over 20 basis points in recent weeks, the number of mortgage applications for purchasing a home decreased by 4% last week compared to the previous week, according to the MBA's seasonally adjusted index. This represents a 15% decrease in purchase demand compared to the same week one year ago. A basis point is equivalent to one-hundredth of a percentage point.

The number of purchase applications decreased due to ongoing affordability challenges, with rates remaining high and home-price appreciation continuing in many markets, according to Joel Kan, an MBA economist.

Mortgage rates may decrease if investors believe inflation is decreasing and the Federal Reserve cuts its rate in September.

"Ivy Zelman, an analyst, stated in an interview on CNBC's "The Exchange" that affordability is still stretched. She believes that mortgage rates should decrease by 100 basis points for the market to see more momentum. If mortgage rates were to drop to five handles, even in the high fives, the market could experience more growth."

Despite a 38% increase in demand compared to the same week last year, applications to refinance a home loan rose by only 0.3% for the week. This is due to rates being only slightly lower than they were last year at this time.

The number of refinance applications increased due to both conventional and FHA activity, with some borrowers seizing the opportunity, according to Kan. Additionally, the conventional refi index reached its highest level since September 2022.