The index of mortgage applications compiled by the Mortgage Bankers Association fell 6.3% last week but during the prior period applications were up 11.9% due to a surge in refinancings.

Purchase applications fell 5.0% last week and so far this month are 2.4% below July.

During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

Applications to refinance mortgages slipped 8.0% following the prior week's surge. Refi's so far in August are 9.0% ahead of July which rose 17.3% versus June.

The effective interest rate on a conventional 30-Year mortgage was stable at 6.05%, the average for August so far. That is down from 6.24% averaged last month and the high of 6.53% in May. The effective rate on a 15-year mortgage also was about stable at 5.47% versus 5.69% last month.

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.