Mortgage application activity for the week ending Sept. 26 was fell 0.2% on a seasonally adjusted basis, according to the Mortgage Bankers Association.

Mortgage refinance volume fell 0.3% week-to-week, while purchase applications were flat.

Purchase applications are down 11% year-over-year and are running about 30% lower than historical norms.

Last week’s interest rate decline did not have any effect in apps.

"Although total purchase application volume was little changed, conventional purchase applications were at the highest level since July," said Michael Fratantoni, chief economist for the MBA. "On the other hand, government application volume fell for the week, with declines in purchase applications for FHA, VA, and Rural Housing Service loans."

While the average interest rate for government loans is slightly lower than those for conventional loans, FHA insurance premiums, as well as average credit scores, have increased and are sidelining some lower-income borrowers.

"Mortgage activity remained relatively level last week as rates started to show improvement after increasing in early September," said Quicken Loans vice president Bill Banfield.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.33% from 4.39% for 80% loan-to-value ratio loans.

Mortgage rates ticked up Tuesday. Changes could be coming with the bad housing news from Monday and the release of the monthly jobs report on Friday. 

The refinance share of mortgage activity remained unchanged at 56% of total applications from the previous week.  The adjustable-rate mortgage (ARM) share of activity decreased to 7.6% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.28% from 4.30%, with points decreasing to 0.15 from 0.22 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.07% from 4.08%, with points decreasing to 0.04 from 0.09 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.55% from 3.56%, with points remaining unchanged from 0.26 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.31% from 3.20%, with points increasing to 0.51 from 0.40 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week.