US mortgage applications fall from 33-month high

New York

US 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 (MBA) 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 per cent 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 US$484,350 or less, averaged 4.14 per cent last week. They were up two basis points from the prior week's 4.12 per cent, the lowest level since September 2017.

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

Meanwhile, 15-year mortgage rates averaged three basis points lower at 3.5 per cent, while the average borrowing costs on five-year adjustable home loans rose two basis points to 3.45 per cent.

Mortgage rates generally increased in line with higher bond yields last week as traders pared their safe-haven bond holdings after US 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 per cent 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 per cent of total applications from 49.8 per cent 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 per cent to 268.6. The latest figure was up almost 4 per cent 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," Mr Kan said. REUTERS