The nation's financial crisis is clearly keeping would-be home buyers out of the market in droves, and the Mortgage Bankers Association said Wednesday morning that its index of purchase and refinance mortgage application activity reach its lowest level in eight years. The trade group's weekly survey for the week ended Oct. 17 found that applications fell 16.6 percent to 408.1, and were off 44 percent compared with the same week one year earlier. The application index is calibrated to March 16, 1990; a reading of 408.1 means that application activity was roughly 4.0 times greater than when the index was first established. The MBA said that refinance applications fell 23.5 percent, while purchase applications dropped 10.9 percent, despite an apparent easing of interest rates for levels seen last week. The refinance share of mortgage activity decreased to 42.6 percent of total applications, from 46.4 percent the previous week; ARM share hovered at less than three percent of all applications. Last week marked one of the few that a separate application index maintained by Mortgage Maxx LLC, called the MAX, matched the dismal numbers seen in the MBA data. The MAX fell 13.1 percent, while a separate California-only application index dropped 7.5 percent, the company reported on Monday afternoon. The MAX, which corrects for multiple applications per household, is traditionally relied upon by prepayment researchers. For the MAX's California index, the reading last week was the worst in a non-holiday week since 1995, publisher Paul Descloux said. "Given the apocalyptic headlines emanating from both investors and the government the past few weeks, any measures that shows mortgage applications increasing should have been viewed skeptically," he said. Most analysts told HW they do not expect to see mortgage applications jump meaningfully throughout the rest of the year; the MBA forecast Tuesday that national unemployment could reach 7.8 percent in 2010, driving continued problems in the mortgage market for some time to come. For more information, visit and