NEW YORK U.S. mortgage application activity increased to its highest level in about 2-1/2 months even as 30-year home borrowing costs rose in the latest week, Mortgage Bankers Association data released on Wednesday showed.
The Washington-based industry group said its seasonally adjusted measure of home loan applications rose 3.3 percent to 405.7 in the week ended March 3. This was the highest since 407.3 in the week ended Dec 16.
Interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loan, averaged 4.36 percent, up from 4.30 percent the prior week.
Conforming loans are those with balances of $424,100 or less and qualify for guarantees from federal mortgage agencies Fannie Mae (FNMA.PK) and Freddie Mac (FMCC.PK).
Last week, mortgage rates rose in step with benchmark U.S. Treasury yields US10YT=RR as a group of Federal Reserve officials signaled the central bank would consider raising interest rates at its March 14-15 policy meeting.
Mortgage rates on other types of home loans that the MBA tracks also increased from the previous week.
MBA's seasonally adjusted gauge on applications to refinance an existing home loan gained 5.2 percent to 1,357.6, the highest since the week of Dec. 16, 2016.
The share of refinancing applications rebounded to 45.4 percent from the prior week's 45.1 percent which was its smallest since November 2008, the Washington-based industry group said.
The MBA's seasonally adjusted gauge on purchase application activity, a proxy for future home sales, increased 1.7 percent to 235.0, the highest since the week ended Jan. 20.
The share of applications for adjustable-rate mortgages grew to 7.7 percent last week, which was their largest since October 2014.
The loan amount on applications to buy a home averaged $313,000, the highest since the MBA survey began in 1990.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)