The MBA said mortgage activity dropped 2 percent, while refinancing decreased by a relatively mild 0.2 percent in the week.
Refinancing held steady at 62 percent of all mortgage activity.
Averages of interest rates for mortgage loans fell in the week to the lowest level since November 2013 with the exception of short term adjustable rate loans, the MBA said.
The average rate for 30-year fixed rate mortgages not backed by the Federal Housing Authority fell from 4.47 percent to 4.45 percent, with points rising from 0.25 to 0.34.
For similar loans backed by the FHA, interest rates rose from 4.12 percent to 4.13 percent, with points falling from 0.15 to 0.1.
For jumbo loans of $417,000 or more, average interest rates fell from 4.42 percent to 4.4 percent, with points rising from 0.11 to 0.14.
Average rates for 15-year, fixed-rate contracts dropped from 3.53 percent to 3.49 percent with points on those loans falling from 0.28 to 0.25, the MBA said.
Average rates for short-term loans with adjustable rates fell from 3.15 percent to 3.11 percent. Points for short-term loans fell from 0.41 to 0.31, the association said.