Total loan application volume increased by 11.8% last week from the previous week, as purchase mortgage volume surged 16% week-over-week, and 9% year-over-year, according to CNBC's Diana Olick. Meanwhile, refinances climbed 9% week-over-week

The recent drastic fluctuations in the mortgage market are the result of recently implemented regulations and new mortgage disclosure rules for lenders, which went into effect October 3. 

"We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures," said Mike Fratantoni, the MBA's chief economist, referring to the the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974. 

The Mortgage Bankers Association ... released its latest projections for mortgage originations in 2016. It expects a steady increase in purchase applications but a large drop in refinances, likely due to the expectation for higher interest rates.

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