The government shutdown appears to be driving a decline in purchase mortgage applications, according to the latest weekly survey from the Mortgage Bankers Association. On a seasonally adjusted basis, purchase applications index declined 5 percent from the previous week. The unadjusted purchase index was also down 5 percent compared with the prior week, and 1 percent compared with the same time last year.

"The government shutdown had a notable impact on the mortgage market last week. Purchase applications for government programs dropped by more than 7 percent over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years," MBA economist Mike Fratantoni said in a statement.    "Conventional purchase applications dropped as well, but not to the same extent, falling almost 4 percent for the week."

Refinance applications increased during the week, with the refinance index up 3 percent, driving the groups’ market composite index up 0.3 percent for the week on a seasonally adjeusted basis.

The refinance share of mortgage activity increased to 66 percent of total applications from 64 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6 percent of total applications.

Rates were also up nearly across the board last week:

The average interest rate for non-jumbo 30-year fixed-rate mortgages increased to 4.46 percent from 4.42 percent.

The average contract interest rate for jumbo 30-year fixed-rate mortgages increased to 4.51 percent from 4.45 percent.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.53 percent from 3.52 percent.

The average contract interest rate for 5/1 ARMs remained unchanged at 3.25 percent.