According to Mortgage Bankers Association, rising home loan rates, the highest in over two months reduced the demand for refinancing last week, with U. S. mortgage applications totals, the lowest since early March.

The industry group's data showed refinancing was renewing the push for mortgage funding much of this year, but that is also losing steam despite relatively low borrowing costs.

The average 30-year mortgage rate has risen 0.12 percentage point to 4.81% from a low of 4.61% of two months ago, though down more than a percentage point from a year ago.

Many homeowners are waiting for the government and government-controlled Fannie Mae and Freddie Mac to remove the kinks from refinance programmes, and once the refinance hurdles have been surmounted, consumers can return to slicing monthly housing costs, spending savings to help stimulate a recessionary economy.

Total U. S. mortgage applications fell 14.2% in week-ended 22nd May, to 786.0 which is 37% below early April's recent peak of 1,250.6.

With jobs at risk, many consumers are holding out for even lower rates and prices, cautious about making such a big purchase, and affordability remains at record highs.