NEW YORK (Reuters) - U.S. mortgage applications slipped to their lowest since mid-February, as 30-year home borrowing costs rose to their highest in three months, the Mortgage Bankers Association said on Wednesday.
The Washington-based group's seasonally adjusted weekly index of mortgage activity fell 2.6 percent to 389.8 in the week ended Oct. 27. This was the lowest since 371.5 in the Feb. 17 week.
Last week, the average interest rate on conforming 30-year fixed-rate mortgages rose 4 basis points to 4.22 percent, the highest since July, the MBA said.
Conforming loans are those with balances of $424,100 or less that qualify for guarantees from federal mortgage agencies Fannie Mae (PK:FNMA) and Freddie Mac (PK:FMCC).
Average interest rates on other types of home loans that the MBA tracks were 3 basis points to 5 basis points higher than the previous week.
Home borrowing costs broadly rose last week in line with higher bond yields with 10-year Treasury yield hitting a seven-month high. They increased on speculation about U.S. President Donald Trump's nominee to head the Federal Reserve.
Trump is expected to announce his selection, possibly Fed Governor Jerome Powell, on Thursday.
Trump also considered current Fed Chair Janet Yellen whose term expires in February; former Fed Governor Kevin Warsh; Stanford University economist John Taylor and his economic adviser Gary Cohn.
The MBA's seasonally adjusted gauge of purchase mortgage activity, a proxy for future home sales, dipped 0.8 percent to 226.1 last week, the lowest in six weeks.
The group's seasonally adjusted index of mortgage refinancing activity declined by 4.5 percent to 1,297.0, the lowest since July.
The share of refinancing requests of total applications shrank to 48.7 from 49.5 percent he prior week.