The Mortgage Bankers Association's Market Composite Index, a measure of weekly application volumes based on surveys of the group's members, edged up a seasonally adjusted 0.5% for the seven-day period ending Aug. 23. While mostly flat, the small rise represented the third increase in the past four weeks after a 10.1% fall in the previous survey. Compared to a year ago, volumes were 20% higher. 

Volumes finished higher as interest rates declined for another week. The contract fixed rate average among MBA members for 30-year conforming mortgages fell to 6.44% from 6.5% seven days earlier. Points used by borrowers to help buy down the rate also decreased to 0.54 from 0.6 for 80% loan-to-value ratio applications. 

"Rates have now come down more than 80 basis points from a year ago," said Joel Kan, MBA's vice president and deputy chief economist, in a press release. 

"Mortgage applications were slightly higher, driven by marginally stronger purchase activity. Refinance applications were essentially unchanged."

The seasonally adjusted Purchase Index climbed up 0.9% from the previous week and was also 9% higher than a year ago. 

Rising inventory has helped keep the surging pace of home prices in check, but they still remain unaffordable for many, several research groups have said. Real estate agents are reporting aspiring buyers are in the market but likely holding off until rates hit specific benchmarks. 

"As observed in recent weeks, despite lower rates, purchase applications have not moved much," Kan said. "Prospective homebuyers are staying patient now that rates are moving lower and for-sale inventory has started to increase."

Meanwhile, the Refinance Index flattened, slipping back 0.1% week over week. Still, the refinance market maintained its recent rebound that started as interest rates began trending downward, with last week's activity up by 85.2% from the same survey period a year ago. 

"Borrowers continue to act," Kan said. The refinance share relative to overall activity also expanded to 46.6% from 46.3% a week earlier. 

The Government Market Index, meanwhile, saw a similar marginal increase from the prior survey, rising 0.7%. As has been the case much of the summer, refinances backed by the Federal Housing Administration and Department of Veterans Affairs lifted overall volumes.

The overall share of FHA-sponsored purchases and refinance loans came in at 15.3%, falling back from 15.6% the previous week. VA-guaranteed loans garnered a 15.9% compared to 15.3%, while the small slice of applications from the Department of Veterans Affairs represented the same 0.4% of volume week over week.