Rising rates helped push consumers out of the market for a mortgage, according to statistics released Wednesday by the Mortgage Bankers Association. The group's weekly application survey found that a composite index fell 1.5 percent to a seasonally-adjusted reading of 425.9 for the week ended Aug. 8; applications are down a whopping 36.9 percent versus year-ago levels. The MBA application index is calibrated to March 16, 1990; a reading of 425.9 means that application activity was roughly 4.3 times greater than when the index was first established. Most Street analysts and other market participants expect demand for mortgages to remain low through the rest of this year, meaning slowing prepayment trends. In the agency market, at least, that trend continued in July, with fixed-rate prepayments generally decreasing by 1 percent CPR; agency ARM prepayments decreased by 1-2 percent CPR, according to data provided by eMBS, Inc. Both refinance applications and conventional purchase applications saw activity drop last week, the MBA said -- although the MBA index doesn't correct for multiple application activity. And therein lies continued consternation for analysts: the MAX index, published by Mortgage Maxx on Monday each week, corrects for multiple applications. But that index found that overall applications rose 3.9 percent last week by its count; analysts have told HW that the two indexes rarely will differ so often in direction as they have in the middle of this year. Mortgage Maxx publisher Paul Descloux, however, implied that the bounce may be nothing more than noise. "After breaking down the prior two weeks, mortgage applications rebound[ed] modestly but remain in the tank," he said. "The factors in place to keep the MAX at currently depressed levels remain." The only area of mortgage banking seeing strong borrower interest, according to the MBA? That would be FHA mortgages (and, to a lesser extent, VA), which saw activity in the sector post an increase this week of 2.9 percent. For more information, visit http://www.mortgagebankers.org.