A rise in mortgage interest rates has led to a decline in people applying for home loans and homeowners refinancing.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased. The average rate dropped to 5.87% from 5.92% last week. A year ago, it was 6.07%, Freddie Mac said.

According to data from Freddie Mac, the average rate on a 30-year fixed mortgage was 6.74% for the week ending Wednesday, down just a single basis point from 6.75% the week prior. The average 15-year fixed mortgage rate was 5.87%, down five basis points from 5.92% last week.

The average rate on 30-year fixed home loans increased to 6.75% for the week ending July 17, up from 6.72% last week.

Analysts believe a modest drop in mortgage rates could prove to be a "magic bullet" for the U.S. housing market.

With Trump’s tax overhaul now in the rearview mirror, a potential Freddie and Fannie conservatorship release could move up the docket.