The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. fell 4.8 percent in the week ended September 25, following a 6.8 percent surge in the previous week. This was the biggest drop since the week ended August 21.

According to the report, refinance applications plunged 6.5 percent, while applications to purchase a home decreased 1.9 percent.

Meanwhile, the average fixed 30-year mortgage rate dropped to 3.05 percent from 3.10 percent.

“There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans, and that could explain last week’s decline in refinances,” noted Joel Kan, an MBA economist. “Many lenders are still operating at full capacity and working through operational challenges, ultimately limiting the number of applications they are able to accept.”