U.S. mortgage applications declined last week-MBA

NEW YORK, Aug 13 (Reuters) - Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.

The MBA's seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.

The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.

The gauge of loan requests for home purchases was steady at 315.2, just above July lows.

Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.

Fannie Mae (FNM.N) and Freddie Mac (FRE.N), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.

The MBA's government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)