NEW YORK (Reuters) - U.S. applications for home refinancing climbed to their highest level in nearly two months last week with their share of total housing loan requests reaching the biggest since February, as home borrowing costs fell, the Mortgage Bankers Association said on Wednesday.
The Washington-based group's seasonally adjusted index on mortgage refinancing activity increased 1.6 percent to 1,455.9 in the week ended Aug. 11. This was the strongest reading since 1,526.8 in the week ending June 16.
The refinancing share of total applications rose to 47.8 percent from 46.7 percent the previous week.
Last week, the average interest rate on conforming 30-year fixed-rate mortgages fell to 4.12 percent, a nine-month low, from 4.14 percent the prior week, the MBA said.
Conforming loans are those with balances of $424,100 or less that qualify for guarantees from federal mortgage agencies Fannie Mae (PK:FNMA) and Freddie Mac (PK:FMCC).
Average rates on other types of fixed-rate mortgages that the MBA tracks declined by 1 to 6 basis points from the prior week.
However, lower borrowing costs didn't increase applications for home purchases last week.
The MBA's seasonally adjusted barometer on purchase mortgage activity, a proxy on future home sales, slipped 1.5 percent to 233.8.
While housing demand remained brisk, home construction hit a soft patch in the second quarter and has yet to rebound.
The U.S. Commerce Department said on Wednesday that housing starts fell 4.8 percent last month.
The MBA's barometer on total mortgage applications adjusted for seasonal factors was up 0.1 percent at 419.1.