NEW YORK (Reuters) - U.S. application activity for refinancing rose to its highest since mid-December as home borrowing costs fell for a third straight week, Mortgage Bankers Association data released on Wednesday showed.


The Washington-based industry group said its seasonally adjusted measure on applications for mortgages rose to 1,263.2 in the week ended Jan. 13, up 6.8 percent from the previous week.


The refinance share of overall mortgage application activity increased to 53.0 percent from the prior week's 51.2 percent.


Interest rates on 30-year, fixed-rate conforming mortgages, the most widely-held type of U.S. home loan, averaged 4.27 percent, down 5 basis points from the prior week.


Conforming mortgages are those with balances of $417,000 or less and qualify for guarantees from federal mortgage agencies Fannie Mae <FNMA.PK> and Freddie Mac <FMCC.PK>.


Three weeks ago, 30-year conforming mortgage rates averaged 4.45 percent, which was the highest since April 2014.

U.S. home borrowing costs have fallen in line with bond yields <US10YT=RR> as a result of renewed investor demand for U.S. government debt. A global bond market selloff was stoked by fears about higher inflation and federal borrowing under a Trump administration and Republican-controlled Congress.

MBA's seasonally adjusted index on application activity to buy a home declined from a six-month high to 229.4, which was 5.2 percent lower from the prior week.

The group's seasonally-adjusted measure on total mortgage applications edged up 0.8 percent to 382.2.

(Reporting by Richard Leong; Editing by Nick Zieminski)