Mortgage applications fell 2.4% in the week ended Aug. 19, as the purchase index fell to its lowest level since December 1996, according the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Refinances slid 1.7% and the purchase index dropped 5.7%.

"Another week of volatile markets and rampant uncertainty regarding the economy kept prospective homebuyers on the sidelines, with purchase applications falling to a 15-year low," said Mike Fratantoni, the MBA's vice president of research and economics.

"This decline impacted borrowers across the board, with purchase applications for jumbo loans falling by more than 15%, and purchase applications for the government housing programs (FHA, VA, and USDA) falling by 8.2%," he added. Although mortgage rates remain quite low, they increased over the week, bringing refinance application volumes down slightly."

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