The numbers: A surge in mortgage rates, and evacuations due to Hurricane Ian, both seriously dampened demand for home purchases and refinances.

Rates are inching even closer to 7%, and buyers have pulled back. The addition of a hurricane in Florida, which prompted widespread closings and evacuations, weighed down the market composite index, a measure of mortgage application volume, the Mortgage Bankers Association (MBA) said on Wednesday.

The market index plunged 14.2% to 218.7 in the week ending September 30. A year ago, the index stood at 684.5.

The big picture: Mortgage application activity—which includes purchases and refinances—has dropped to the slowest pace since 1997, the MBA said.

That’s because mortgage rates have resumed their march upwards, which has chilled buyer demand, as monthly payments are poised to keep rising.

Some buyers are taking the rise in rates as a cue to be more patient and discerning with their search.

Mortgage rates are now at the highest level since 2006.

But the big drop in applications reported this week may likely recover soon, since the plunge was partly caused by widespread closures and evacuations due to the hurricane.

“Applications in Florida fell 31%, compared to 14% overall, on a non-seasonally adjusted basis,” Joel Kan, associate vice president of economic and industry forecasting at the MBA, said in a statement.

Key details: The refinance index plunged by 17.8%, and was down 86% compared to a year ago.

The purchase index, which measures mortgage applications for the purchase of a home, fell by 12.6% from the previous week.

The average contract rate for the 30-year mortgage for homes sold for $647,200 or less was 6.75% for the week ending September 30. That’s up from 6.52% the week before, the MBA said.

For homes sold for over $647,200, the average rate for the 30-year was 6.14%. The 15-year rose to 5.96%.

The rate for adjustable-rate mortgages (ARM), which comprised 11.8% of total applications, rose to 5.36%. The ARM share increased slightly from last week, to the highest level since 2008.

Market reaction: The yield on the 10-year Treasury note fell below 3.7% in early morning trading

Via Realtor.com