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According to the Mortgage Bankers Association's seasonally adjusted index, total mortgage application volume was own 2.5 percent last week, attributed to recent stock market volatility.

Annually, volume was down 16 percent, though rates were nearly a full percentage point lower at that time. Mortgage applications to buy a home dropped two percent week-over-week, and down 0.4 percent annually, the first annual decrease since August, CNBC reports. "Rates are at risk of bouncing higher more noticeably unless they get some serious help," says Matthew Graham, CEO of Mortgage News Daily. "That help would either need to come from surprisingly weak economic data, an even bigger downturn in stocks, or an unexpected headline that implies big economic risks."

Home sales have been slowing for months, although there was a slight uptick in signed contracts to buy existing homes in September. That may have been buyers rushing in to make deals before interest rates rose further. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged at 5.11 percent, with points decreasing to 0.50 from 0.52 (including the origination fee) for loans with 20 percent down payments.

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