The July 4th holiday put a stop to the recent run-up in mortgage applications despite near record-low rates, and the purchase-only index fell to its lowest level in nearly 14 years, the Mortgage Bankers Assn. reported Wednesday.

For the week ending July 9, the MBA's Market Composite Index was down 2.9%, seasonally adjusted for the holiday. Unadjusted, the index dropped 12.6% from the prior week.

The Refinance Index decreased 2.9% from the previous week; the seasonally adjusted Purchase Index decreased 3.1% to its lowest level since December 1996. The unadjusted Purchase Index decreased 12.7% compared with the previous week and was 43% lower than Independence Day week one year ago.

The four week moving average for the seasonally adjusted Market Index remained up 1.5%. But the four week moving average for the seasonally adjusted Purchase Index was down 2.4%. The average for the Refinance Index was up 2.6%.

The refinance share of mortgage activity was flat with the previous week at 78.7% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 5.5% from 5.4%.

The MBA said the average contract interest rate for 30-year fixed-rate mortgages increased to 4.69% from 4.68% during the week, with points increasing to 0.96 from 0.86 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The rate for 15-year fixed-rate mortgages increased to 4.12% from 4.11% percent, with points increasing to 1.04 from 0.93 (including the originationfee) for 80% LTV loans.

One-year ARMs remained unchanged at 7.20% , with points decreasing to 0.22 from 0.24 (including the origination fee) for 80% LTV loans.