Mortgage application volume dropped 4.2%, as rates were slightly changed, and data were adjusted for the Columbus Day holiday, according to data from the Mortgage Bankers Association's weekly mortgage applications survey.

Refinances fell 5% in the week, and the purchase index rose 1%.

Without adjustment, applications plunged 14% and purchases dropped 9%.

Refinances were 82% of activity, off slightly from 83% the week before, while adjustable-rate mortgages accounted for 4% of applications, flat from the prior week. HARPs were 22% of refinance applications, up from 18% a week earlier.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.57% from 3.56%, while 15-year fixed-rate mortgages dipped to 2.87% from 2.88%.

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