[ NEW YORK] Applications for US mortgages stabilized at the end of 2016 following a recent drop as borrowing costs on home loans eased from more than two-year highs, Mortgage Bankers Association data released on Wednesday showed.

The Washington-based industry group said its measure on requests for mortgages edged up to 358.5 in the week ended Dec 30, 0.1 per cent higher than the prior week.

Interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loans, averaged 4.39 per cent, down from the prior week's 4.45 per cent which was the highest since April 2014.

Conforming mortgages are those with balances of US$417,000 or less and qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac.

Interest rates on other types of mortgages were unchanged to 0.13 percentage point lower on the week.

Domestic home borrowing costs retreated along with a drop in US bond yields as investors scooped up US government debt at year-end following a global bond market selloff triggered by worries about a surge in inflation and federal borrowing under a Trump administration.

In early trading on Wednesday, the benchmark 10-year Treasury yield was 2.45 per cent. It had hit 2.64 percent on Dec 15, which was its highest since September 2014, according to Reuters data.

A pullback in mortgage rates buttressed refinancing activity at the end of 2016.

MBA's refinancing index was up 1.7 per cent at 1,132.0 with the refinance share of overall loan activity rising to 52.2 per cent from 51.8 per cent the previous week.

The group's measure on loan applications to buy a home, which is seen as a proxy on future home sales, dipped 1.4 per cent to 228.0.

REUTERS