Mortgage applications filed in the U.S. plummeted 5.5% as both the refinance index and home purchase index declined ahead of Wednesday's Federal Open Market Committee.

The Mortgage Bankers Association pointed to the meeting as a fear factor for the market since talks of a potential mortgage-backed securities or Treasurys tapering could come out of the Fed today. 

If the Fed decides to begin tapering this month, the market will know by this afternoon.

The refi index alone fell 4%, while the purchase index declined 6% ahead of the meeting.

"Mortgage applications fell further last week, with the market index falling to its lowest level in more than a dozen years," said Mike Fratantoni, MBA’s vice president of research and economics. "Both purchase and refinance applications fell as interest rates increased going into today's Federal Open Market Committee meeting."

The refi share of mortgage activity increased to 66% of total applications from 65% the prior week. Meanwhile, the adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

The average contract interest rate for a 30-year, FRM with a conforming loan balance increased to 4.62%, up from 4.61%.

The average 30-year FRM with a jumbo loan balance increased to 4.61%, up from 4.59%. The average 30-year backed by the Federal Housing Administration fell to 4.25% from 4.30%.

The average contract interest rate for the 15-year FRM stayed unchanged at 3.66%.

Meanwhile, 5/1 ARMs grew to 3.20% from 3.11%.