The total number of mortgage applications fell 4.5% last week and continued the recent decline which has pulled applications 18.5% below the recent peak in early June, according to the Mortgage Bankers Association.

Purchase applications fell 3.6% on the heels of a 2.2% decline the week prior. The average level in August is off 1.3% from July. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.

Mortgage applications to refinance fell a hard 5.4% w/w and are down 10.6% in August versus July.

The effective interest rate on a conventional 30-year mortgage backpedaled further to 5.98% from 6.02% the prior week. The effective rate on a 15-year mortgage also fell to 5.66%.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.