Mortgage Bankers Association released its weekly survey for the week ending October 3, in which they found that loan application volume increased a slight 2.2 percent on a seasonally adjusted basis from one week earlier, and fell 28.6 percent compared to the same week in 2007. While the amount of refinance applications was up 0.9 percent from the week ending on September 26, the purchase index saw a greater increase — explaining the decrease in the refinance share of mortgage activity from 44 percent to 43.4 percent. According to the MBA index, the average interest rate for 30-year fixed-rate mortgages decreased to 5.99 percent, and the average rate on 15-year fixed-rate mortgages decreased to 5.71 percent.  The interest rate on one-year ARMS remained steady at 6.6 percent. Mortgage Maxx Inc.’s mortgage application index, which corrects for multiple applications by the same borrower, reported that application volume actually fell 7.3 percent from the prior week.  Regardless of their motive, this indicates that buyers chose to shop around this week. The MAX is now down 13 percent the past two weeks. “This is not going well as the credit crisis exacerbates already weak mortgage demand,” said Mortgage Maxx in a release Monday.  “Psychological damage to the consumer should not be underestimated.” The golden state, well versed in the psychological damage caused by the housing crisis, saw applications fall 10.2 percent from the last week, well above the nation’s average decline. Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor’s note: To contact the reporter on this story, email [email protected].