NEW YORK (Reuters) - Refinancings' share of U.S. mortgage applications shrank to its lowest level since late 2008 at the peak of the global credit crisis, as home borrowing costs remained elevated in line with bond yields, the Mortgage Bankers Association said on Wednesday.
The share of requests from homeowners to refinance a mortgage fell to 46.2 percent in the week ended Feb. 17. This compared with 46.9 percent in the previous week and was their smallest share since November 2008, the Washington-based industry group said.
The MBA's seasonally adjusted index on refinancing activity dipped 1 percent to 1,227.6, its weakest level in six weeks. A year ago, it stood at 2,267.4.
Refinancing applications declined with a pickup in mortgage rates as U.S. Treasury yields rose last week following Federal Reserve Chair Janet Yellen's testimony before Congress, where she hinted chances of a rate hike at an upcoming policy meeting.
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 4.32 percent the prior week. It was up about half a percentage point from a year earlier.
Conforming loans are those with balances of $424,100 or less and qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac.
Mortgage rates on other types of home loans that the MBA tracks were broadly higher from the prior week.
Higher borrowing costs also reduced applications on home purchases.
The MBA's seasonally adjusted gauge on purchase application activity, a proxy for future home sales, fell 2.8 percent to 216.9 in the latest week, which was the lowest since November. A year ago, it was 217.9.
The group's barometer on overall mortgage activity on a seasonally adjusted basis decreased 2.0 percent to 371.5 in the latest week and was down from 521.5 a year earlier.