US mortgage applications surge as rates slide -MBA

NEW YORK, Jan 16 (Reuters) - U.S. mortgage applications surged last week, with demand hitting its highest since April 2004 as interest rates plunged, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ended Jan. 11 surged 28.4 percent to 906.4, its highest since the week ended April 2, 2004.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.62 percent, down 0.11 percentage point from the previous week, and its lowest since the week ended July 1, 2005, when they stood at 5.58 percent.

Interest rates were below the year-ago level of 6.19 percent.

The MBA's seasonally adjusted purchase index jumped 11.4 percent to 461.2, its highest since the week ended Dec. 7, 2007, and above its year-earlier level of 439.7. The purchase index is considered a timely gauge of U.S. home sales.

Demand for home loan refinancing surged last week as the group's seasonally adjusted index of refinancing applications skyrocketed 43.4 percent to 3,575.5, its highest since the week ended April 2, 2004. (Reporting by Julie Haviv; Editing by James Dalgleish)