For the last month mortgage rates have been sitting at a six month low, but that hasn't boosted mortgage demand, CNBC reports.
Total application volume dropped by 6.2% last week, when compared to the week before.
The Mortgage Bankers Association's seasonally adjusted index is now lower by 17% compared to the same period last year.
There is homebuyer demand, but the supply crisis is seeping into the mortgage market, CNBC added. Applications for a home purchase loan dipped by 4% last week, but is still 8% higher than a year ago. One noticeable change is in the size of the average purchase loan application.
"We're seeing indications that entry level buyers continue to come into the market as jumbo borrowers looking at bigger homes step back," Mike Fratantoni, chief economist for the MBA, told CNBC. "Last week, the average loan size for home purchase dropped to its lowest level since January."
What's Hot On TheStreet
The stock market may be overvalued: Now may be the time to pay extra attention to red-hot tech stocks such as Apple (AAPL) - Get Report and Facebook (FB) - Get Report . As TheStreet first reported Tuesday afternoon, asset valuations are somewhat "rich" by standard metrics, Federal Reserve Chair Janet Yellen said in London during a conversation about economic issues with British Academy President Lord Nicholas Stern. Yellen's comments on equity valuation and bank strength closely mirrored Fed Vice Chairman Stanley Fischer's from an IMF event held earlier in the day.
The iPhone has changed how you make money: TheStreet's Scott Gamm is out with a piece that will really get you thinking. Apple's iPhone will turn 10 years old on Thursday. The device not only turned Apple into one of the world's most valuable companies, helping to boost its stock price more than 700%, it also changed the way we invest and trade stocks Gamm points out.
In fact, the original iPhone -- and the current versions -- have an internal stocks app, allowing users to check the broader market indexes and individual stock prices. Having this in your pocket was a big deal 10 years ago.
"I think it's actually made the life for a typical investor much easier," Angelo Zino, an analyst with CFRA Research, told TheStreet. "I think they've been able to tap news flows much quicker."
Visit here for the latest business headlines.