The Mortgage Bankers Association's index of applications for home purchases decreased 4.4% to 155 in the week ended May 30, which included the Memorial Day holiday. The contract rate on a 30-year mortgage fell 6 basis points to 6.92%, according to data released Wednesday. 

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The MBA report also showed a 3.5% drop in a measure of refinancing, the fourth straight decline.

Despite the easing in home-financing costs last week, a sustained decline is needed to help the housing market gain traction. While house hunters are finding they have more choices as a larger number of sellers list their properties, asking prices remain elevated and mortgage rates are still closer to 7% than 6%.

The housing market has had a disappointing start to the key spring selling season. Contract signings on previously owned homes fell in April by the most since September 2022, according to National Association of Realtors data released last week.

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.