Americans are noting more limited employment opportunities.
The contract rate on a 30-year fixed mortgage eased one basis point to 6.54%.
The plunge sparked a surge in refinancing applications.
The report offers the Fed further evidence that the risks of a reacceleration in inflation are diminishing.
The data shows how the Fed's interest rate policy has tempered demand.
High mortgage rates are keeping home buyers on the sidelines.
Mortgage rates move in tandem with Treasury yields, which also declined notably last week.
Fewer firms say they plan to boost pay in the next three months.
New business at service providers shrank for the first time since October.
A small-business sentiment index recorded its seventh decline in the last eight months.