The Mortgage Bankers Association reported Wednesday that is Market Composite Index, which measures the volume of new mortgages, fell 14.4% on a seasonally adjusted basis from the previous week. The MBA noted that the index did not take into account the Veterans Day holiday and said that the unadjusted index fell 15%.

The average rate for 30-year fixed-rate mortgages increased to 4.46% from 4.28%, with points increasing to 1.13 from 1.04 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. This was the highest rate since the week of Sept. 10. Similarly, 15-year fixed-rate mortgages increased to 3.87% from 3.64%, matching the recent high of Sept. 17, with points decreasing to 0.91 from 1.08.

"Rates increased sharply last week due to stronger economic data and lingering uncertainty regarding the structure and impact of the Fed's QE2 program. Mortgage applications, particularly for refinances, dropped in response," said Michael Fratantoni, MBA's Vice President of Research and Economics.

The Refinance Index decreased 16.5% from the previous week and was at its lowest level since July. The seasonally adjusted Purchase Index decreased 5.0% from the previous week after three consecutive weekly increases. The unadjusted Purchase Index decreased 8.2% from the previous week and was 11.3% lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index was down 2.8%. The four week moving average was up 1.3% for the seasonally adjusted Purchase Index, while this average was down 3.7% for the Refinance Index.

The refinance share of mortgage activity decreased to 80.3% of total applications from 81.7% the previous week. The adjustable-rate mortgage(ARM) share of activity remained constant at 5.3% of total applications.