Mortgage rates in the United States inched up slightly in the week ended Sept. 10, 2014, according to Freddie Mac's weekly primary mortgage market survey. But, mortgage applications declined to their lowest since December 2000.

The average 30-year-fixed mortgage rates spiked to 4.12 percent from last week's 4.10 percent. The rate was 4.57 percent at the same time, last year.

The average 15-year-fixed mortgage rates went up to 3.26 percent from last week's 3.24 percent. It averaged 3.59 percent at the same time, last year.

The five-year treasury-indexed hybrid adjustable mortgage rate went up slightly to 2.99 percent from last week's 2.97 percent. The rate was 3.22 percent a year ago.

The average one-year treasury-indexed adjustable mortgage rate also continued its upward trend increasing to 2.45 percent from last week's 2.40 percent. The rates averaged 2.67 percent at the same time last year.

Freddie Mac experts attribute the increase to better yields on treasury bonds.

"Mortgage rates were up slightly this week, following the increase in 10-year Treasury yields, despite last week's disappointing employment report. The U.S. economy added only 142,000 jobs in August, after a 212,000 gain in July and a 267,000 increase in June. The unemployment rate fell to 6.1 percent in August from 6.2 percent the previous month," Frank Nothaft, chief economist at Freddie Mac, said in a statement.

The Mortgage Bankers Association also revealed their weekly home loan application report which showed a considerable dip in applications. The MBA's market Composite Index, a measure that gauges mortgage activity and application volume across the country, was down 7.2 percent on a week-over-week basis reaching record lows.

The refinancing index was hit hard when compared to the purchase index. It declined 11 percent to reach the lowest since November 2008. The purchase index fell 3 percent from the previous week.

According to Freddie Mac, refinancing applications took a hit because of The Labor Day Holiday.

"Refinance applications are likely to be more sensitive to these phenomena, as busy adults can postpone a refinance application to another week. If you are buying a home, generally one would need to submit the purchase loan application soon afterwards, per the sales contract," Nothaft was quoted by MarketWatch.

Experts add that low mortgage rates aren't major regulators of demand in the market.

Guy Cecala of Inside Mortgage Finance told CNBC in a previous interview that "home prices, mortgage underwriting, employment, and a basic belief that it is a good time to buy home are major factors that seem to influence home buying more than rates."

Bert Selva, CEO and president of Shea Homes, also explained to The Wall Street Journal that buyers now have more choices and are therefore, more cautious about buying.

Last month, Freddie Mac released a report that explained why mortgage applications haven't picked up despite the low mortgage rates. Read the full report here.