Mortgage applications fell for a second consecutive week, led by a decline in demand for home purchase loans, as interest rates reached new multiyear highs, an industry trade group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended April 14 decreased 1.7 percent to 569.6 from the previous week's 579.4.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.56 percent, up 0.06 percentage point from the previous week, its highest level since the week ended June 7, 2002 when it reached 6.65 percent.
The 30-year fixed-rate mortgage, the industry benchmark, is also above last year's high of 6.33 percent, reached in the week of November 11 after climbing on and off from a 2005 low of 5.47 percent in June.
The MBA's seasonally adjusted purchase mortgage index fell 2.7 percent to 407.4 from the previous week's 417.7.
The index -- widely considered a timely gauge of U.S. home sales -- was also below its year-ago level of 466.7.
The group's seasonally adjusted index of refinancing applications decreased 0.4 percent to 1,526.1 compared to 1,532.4 the previous week. A year earlier the index stood at 1,870.0.
The refinance share of mortgage activity increased to 36.4 percent of total applications from 36.0 percent the previous week.
Fixed 15-year mortgage rates averaged 6.19 percent last week, up from 6.17 percent the previous week. Rates on one-year adjustable-rate mortgages (ARMs) increased to 6.00 percent from 5.97 percent.
Historically low mortgage rates have fueled a five-year housing boom, helping support the U.S. economy's recovery from recession despite uncertain business investment.
Analysts differ on whether or not there is a housing bubble, but most agree that the market is cooling off from its record run.
The MBA's soft data followed other reports this week that showed cooling in the U.S. housing sector.
The Commerce Department said on Tuesday the pace of U.S. housing construction slowed more than expected in March as both the rate of starts and permits declined to their lowest levels in a year.
Earlier in the week, the National Association of Home Builders said its influential index of U.S. home builder sentiment fell for a fourth consecutive month in April to its lowest level since November 2001.
The MBA's survey covers about 50 percent of all U.S. retail residential mortgage originations. Respondents include mortgage bankers, commercial banks and thrifts.
