NEW YORK -- Applications for U.S. home mortgages fell last week, pulled down by a drop in refinancings as interest rates rose for the third straight week, an industry group's data showed Wednesday.
The seasonally adjusted index of total mortgage applications fell 2.2 percent in the week ended Oct. 13 to 585.8, extending its drop for a second consecutive week, according to the Mortgage Bankers Association.
The MBA's index of home purchase applications edged higher, however, stabilizing after falling more than 100 points to 375.9 in the year through August. The component index of home purchases rose 0.4 percent to 384.7, while the gauge of loan refinancing slipped 5.3 percent to 1,758.2.
Some economists viewed the purchase index and other recent housing data as evidence the market's slide has subsided.
The U.S. Department of Commerce on Wednesday reported housing starts jumped 5.9 percent in September to a 1.772 million annualized pace, versus expectations in a Reuters survey for a drop to a 1.64 million rate. A drop in building permits clouded the future.
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On Tuesday, the National Association of Home Builders said its sentiment index rose in October for the first month in nine.
"The housing market is showing signs of bottoming" after its slump from a record pace, said Richard Yamarone, chief economist at Argus Research in New York. That doesn't mean investors should be expecting a rebound, though, he said.
A three-week rise in interest rates has begun to choke off loan refinancing opportunities that had lifted the MBA's mortgage applications index to a nine-month peak of 633.9 in late September from 527.6 in July.
In the week ending Oct. 13, long-term, 30-year fixed-rate mortgages averaged 6.33 percent, 0.15 percentage point above the September low of 6.18 percent that had helped push the rate of refinancings to its highest in almost a year, the MBA figures showed. Last week's rate rose 6 basis points from the preceding week.
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