Mortgage applications to refinance, which are most rate-sensitive, continued their decline, down 2 percent for the week, seasonally adjusted. Refinance activity is still 23 percent higher than one year ago, when mortgage rates were higher.

Loan applications to purchase a home, while less rate-sensitive, backed off as well, falling 0.4 percent for the week. Purchase applications are now 9 percent higher than one year ago. At the beginning of this year the annual gains were in the double digits.

The Federal Reserve is not expected to raise interest rates Wednesday but could do so in December and again before the all-important spring housing season. With home-price gains accelerating again now, that could be a double whammy to sales. The home ownership rate did bounce higher in the latest quarter, but analysts expect it will fall further before bottoming out.