US mortgage applications slump, costs increase-MBA

NEW YORK, Nov 5 (Reuters) - U.S. mortgage application demand skidded last week, driven by a nearly 30 percent slump in demand to refinance home loans as borrowing costs rose, a trade group said on Wednesday.

The Mortgage Bankers Association's seasonally adjusted mortgage applications index, which includes both purchase and refinance loans, slid 20.3 percent to 379.9 in the week ended Oct. 31.

Requests for applications to buy homes as well as refinance mortgages have been swinging dramatically since early September as chaos swept over global financial markets.

The trade group's seasonally adjusted purchase index dropped 13.9 percent to 260.9, while its refinancing applications gauge sank 27.8 percent to 1,075.4 in the last week of October.

Average 30-year mortgage rates increased by 0.21 percentage point to 6.47 percent last week, matching the level of the week ended Oct. 10.

That fixed home loan rate is edging closer to this year's peak of 6.59 percent reached during the summer, well above the 2008 low of 5.49 percent in January, according to the Mortgage Bankers Association.

Intensifying worry about potential job losses have chipped away at U.S. consumer confidence, stoking fears of a deepening recession and inhibiting demand for home purchases, analysts have said. (Reporting by Lynn Adler)