Mortgage applications are falling, further evidence that things in the economy are heading south. MarketWatch reports on the state of mortgage applications:

Applications for the ended Sept. 26 were also lower
than in the same week during 2007, down 28.4%, the Washington-based MBA
said. The group’s survey covers about one half of all U.S. retail
residential mortgage applications.

   
       

Applications to purchase
a home were down a seasonally adjusted 10.9%, compared with the week
before. Filings to refinance existing mortgages fell 34.7% on a
week-to-week basis.

There are hopes that liquidity will increase if the Senate passes a bailout bill and mortgage interest rates lower. But between potential buyers and their fear of the housing market and mortgage lenders’ reluctance to issue mortgages to some buyers, things might be moving toward an impasse.