Mortgage lenders were less busy last week, even as interest rates held steady. Unlike rates, the stock market saw wide swings, mostly lower, and that may have spooked homebuyers.

Total mortgage application volume fell 2.5 percent last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was 16 percent lower than a year ago, when mortgage rates were nearly a full percentage point lower.

Mortgage applications to purchase a home, which are less sensitive to weekly interest rate moves, fell 2 percent for the week and were 0.4 percent lower than the same week in 2017. That's the first annual drop since August.

"Purchase applications may have been adversely impacted by the recent uptick in rates and the significant stock market volatility we have seen the past couple of weeks," said Joel Kan, an MBA economist.

Home sales have been slowing for months, although there was a slight uptick in signed contracts to buy existing homes in September. That may have been buyers rushing in to make deals before interest rates rose further.

Read more in CNBC.