NEW YORK (Reuters) - U.S. mortgage applications declined from an 11-month high last week as home borrowing costs increased in the wake of encouraging domestic economic data, the Mortgage Bankers Association said on Wednesday.
The Washington-based industry group said its seasonally adjusted barometer on requests for loans to buy a home and to refinance one fell 2.7 percent to 400.6 in the week ended Jan. 18. A week earlier, it reached 411.8, the highest reading since February 2018.
The average interest rate on 30-year fixed-rate mortgages with loan balances of $484,450 or less edged up to 4.75 percent from the previous week’s 4.74 percent, which was the lowest since late April.
Mortgage rates rose in step with U.S. bond yields, which increased last week on better-than-expected jobless and regional manufacturing data. Hopes for progress to resolve the trade dispute between China and the United States, together with gains on Wall Street, also lifted Treasury yields.
Other home loan rates tracked by MBA rose by 4 to 5 basis points from the week before. Fifteen-year mortgage rates bucked the trend, dipping to 4.12 percent from 4.13 percent.
“Mortgage application activity cooled off last week after two consecutive weeks of sizeable increases,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
“Reversing the recent downward trend, rates increased for most loan types last week, due to better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets,” Kan added.
MBA’s seasonally adjusted gauge on mortgage requests for home purchases decreased 2.2 percent to 272.5 last week. It fell from the prior week’s 278.5, which was the strongest reading since April 2010.
The group’s weekly barometer on home refinancing fell 5.3 percent to 1,110.5 from 1,172.4, which was the highest since March 2018.
The refinancing share of total applications last week shrank to 44.5 percent from 46.8 percent, which was the largest since January 2018.
The share of applications for adjustable-rate mortgages decreased to 8.3 percent from 9.2 percent, which was the biggest since October 2014.
Reporting by Richard Leong; Editing by Chizu Nomiyama and Paul Simao