The 15-year fixed-rate average slipped to 3.54 percent with an average 0.7 point. It was 3.60 a week ago and 2.86 percent a year ago. The 15-year fixed rate has stayed above 3 percent since early June.

Meanwhile, hybrid adjustable rate mortgages were higher. The five-year ARM increased to 3.24 percent with an average 0.5 point. It was 3.21 a week ago.

The one-year ARM climbed to 2.64 percent with an average 0.4 point. It was 2.67 percent a week ago.

“The Fed is monitoring the housing market closely after the run up in mortgage rates over the past few months,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week.”

Meanwhile, mortgage applications continue to decline, according to the latest data from the Mortgage Bankers Association.

The Market Composite Index, a measure of total loan application volume, fell 2.5 percent from the previous week. The Refinance Index dropped 5 percent and has fallen 64.2 percent from its recent peak in early May. The Purchase Index went down 0.3 percent.

The refinance share of mortgage activity sank to its lowest level since April 2011, accounting for 60 percent of total applications. Refinances had accounted for more than 80 percent of applications earlier this year.