* Average 30-year mortgage rates hit highest since October 2014
* Refinancing applications fall to lowest since early January
* Purchase application activity slips to lowest in four weeks (Recasts first paragraph, adds details on application data)
By Richard Leong
NEW YORK, Dec 14 (Reuters) - A rise in interest rates on U.S. 30-year fixed-rate mortgages to their highest in more than two years has pushed more people seeking to buy a home or refinance one to the sidelines, an industry report released on Wednesday showed.
Applications for mortgages fell for a third straight week to the lowest since the start of the year as borrowing costs on 30-year home loans, the most widely held type of home loan in the United States, scaled higher with U.S. bond yields, according to the Mortgage Bankers Association.
The Washington-based industry group said its measure of requests for mortgages fell 4.0 percent in the week to Dec. 9 to 397.5, its lowest since 328.6 in the week ended Jan. 1.
The average rate on 30-year conforming loans with balances of $417,000 or less, which mortgage agencies Fannie Mae and Freddie Mac guarantee, edged up from 4.27 percent to 4.28 percent, the highest since October 2014, the MBA said.
Home borrowing costs have climbed with a surge in U.S. 10-year Treasury bond yields, which this week hit their highest since September 2014 in the wake of Donald Trump's U.S. presidential win.
Traders have bet on faster economic growth and inflation if Trump and the Republican-controlled Congress enact big tax cuts and federal spending, along with looser regulations and stricter trade policies.
Interest rates on other types of mortgages were little changed or lower on the week.
The average 15-year mortgage rate dipped to 3.52 percent from 3.53 percent, while the average five-year adjustable rate fell to 3.28 percent from 3.39 percent.
The spike in 30-year mortgage rates, which have risen about 0.50 percentage point since the Nov. 8 election, has hit refinancing hard.
MBA's seasonally adjusted refinancing index fell 3.6 percent to 1,407.0 last week, its lowest since the week of Jan. 8.
The group's seasonal gauge of applications to buy a home, seen as a proxy for future home sales, declined 3.3 percent to 226.7, the lowest in four weeks.
Reporting by Richard Leong; Editing by Chizu Nomiyama and James Dalgleish