NEW YORK (Reuters) - U.S. mortgage applications rose last week, led by an increase in refinancing activity, as home borrowing costs broadly fell, Mortgage Bankers Association said on Wednesday.
The Washington-based group's seasonally adjusted index of overall mortgage activity rose 3.0 percent to 418.7 in the week ended Aug. 4.
MBA's seasonally adjusted barometer on refinancing requests increased 5.3 percent to 1,433.2 last week, raising its share of overall mortgage activity to 46.7 percent from 45.5 percent the prior week.
The group's seasonally adjusted gauge of home purchase applications, a proxy on future home sales, edged up 0.8 percent to 237.3 for last week. It hit a near 4-1/2 month low the previous week.
"The trend for purchase applications is still lower after an early-summer spike, but it looks like (refinancings) are slowly starting to pick themselves off the post-election lows logged in December," FTN Financial's manager of mortgage strategy Walt Schmidt wrote in a research note.
In late 2016, refinancing activity plummeted as mortgage rates surged to their highest in over two years. Home borrowing costs jumped in step with bond yields on worries that U.S. President Donald Trump and Republican lawmakers would enact tax reform and other fiscal programs that would boost inflation.
Since then, mortgage rates have retreated with bond yields as Trump and Congress have not passed any fiscal measures.
Last week, the average interest rate on conforming 30-year fixed-rate mortgages slipped to 4.14 percent from 4.17 percent the previous.
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 rates on other types of mortgages that the MBA tracks fell 1 to 5 basis points from the preceding week.
Graphic: http://fingfx.thomsonreuters.com/gfx/rngs/1/1214/1833/index.html