U.S. mortgage applications fall from 33-month high

NEW YORK (Reuters) - U.S. mortgage applications declined last week from about a 33-month peak as most home borrowing costs moved up from their lowest levels since September 2017, the Mortgage Bankers Association said on Wednesday.

The Washington-based group's seasonally adjusted index on loan requests, both to buy a home and to refinance one, fell to 511.8 in the week ended June 14. It fell 3.4% from the prior week's 529.8, which was the highest reading since September 2016.

Interest rates on 30-year fixed-rate "conforming" mortgages, or loans whose balances are $484,350 or less, averaged 4.14% last week. They were up 2 basis points from prior week's 4.12%, the lowest level since September 2017.

Other 30-year mortgage rates MBA tracks were unchanged to 3 basis points higher from the week before.

Meanwhile, 15-year mortgage rates averaged 3 basis points lower at 3.50%, while the average borrowing costs on five-year adjustable home loans rose 2 basis points to 3.45%.

Mortgage rates generally increased in line with higher bond yields last week as traders pared their safe-haven bond holdings after U.S. President Donald Trump called off threatened tariffs on Mexico and encouraging data on retail sales and industrial output.

MBA's seasonally adjusted gauge on refinancing applications fell 3.5% to 1,888.8 from prior week's 1,956.5, which was the highest since November 2016.

The refinance share of mortgage activity grew to 50.2% of total applications from 49.8% the week before.

“Borrowers were sensitive to rising rates, but the refinance share of applications was still at its highest level since January 2018, and refinance activity was at its second highest level this year," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

The group's barometer on loan applications for home purchases, which is seen as proxy on future housing activity, slipped 3.5% to 268.6. The latest figure was up almost 4% from a year ago.

"Strong demand from first-time buyers and low unemployment continue to push this year’s purchase activity above a year ago," Kan said.

(Graphic: U.S. mortgage applications interactive - https://tmsnrt.rs/2RnEpRD)

(Reporting by Richard Leong; Editing by Chizu Nomiyama and Jonathan Oatis)

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