Mortgage rates are now falling but demand is still weaker

Applications for a mortgage to purchase a home fell 3% for the week and were 3% higher than the same week one year ago. Homebuyers continue to face more than just high mortgage rates. They are up against still lean supply, high prices, and continued uncertainty over the direction of the economy and inflation.

Mortgage rates continued to move lower this week, according to a separate survey from Mortgage News Daily. They now sit at the lowest level since May 14. The drop is mirroring the fall in oil prices, as investors react to a potential end to the war with Iran.

"The only warning is that some analysts think oil prices have already gotten ahead of themselves in that regard," wrote Matthew Graham, chief operating officer at Mortgage News Daily. "If those analysts are right, it could limit any additional momentum toward lower rates until peace is on more solid footing."

Wednesday will mark the first meeting of the Federal Reserve with its new chairman, Kevin Warsh. It is not expected that the Fed will change interest rates, but investors will be listening for any clues into what may be coming.