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Many more Americans seek home loans as rates drop -MBA

* U.S. mortgage requests reach highest level since July

* Share of refinancing activity hits biggest in 11 months

* Home borrowing costs fall with lower U.S. bond yields (New throughout, adds details, comment)

NEW YORK, Jan 9 (Reuters) - Applications for home mortgages jumped by the most in more than three years after the interest rate on the benchmark 30-year fixed rate home loan dropped to its lowest since April, the Mortgage Bankers Association said on Wednesday.

The Washington-based group's seasonally adjusted index on mortgage applications increased 23.5 percent to 362.7 in the week ended Jan. 4. It was the largest weekly increase since October 2015 and the index's highest level since July.

“Mortgage rates fell across the board last week and applications rebounded sharply, after what was a slower than usual holiday period," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

The increase was led by the largest surge in mortgage refinancing applications in four years and comes as the interest rate on 30-year fixed rate mortgages fell to 4.74 percent last week from 4.84 percent the week before. That is the lowest that key borrowing rate has been since late April.

The share of refinancing of total applications grew to 45.8 percent, its largest since February 2018, compared with 42.7 percent the week before.

Applications for mortgages to purchase a home jumped 16.53 percent from a week earlier.

“Purchase applications had their strongest week in a month, finishing over 4 percent higher than a year ago, as both conventional and government purchase activity bounced back with solid gains after a sluggish holiday season,” Kan said.

Thirty-year mortgage rates on loan balances of $484,350 or less topped out at 5.17 percent in November as the U.S. Federal Reserve signaled its intent to press ahead with its three-year-old campaign of interest rate increases.

But Fed officials recently signaled they would likely slow their pace of rate hikes after signs of tightening financial conditions including the biggest December swoon for U.S. stocks since the Great Depression.

U.S. Treasury bond yields have fallen since then, and mortgage rates, most sensitive to the 10-year U.S. Treasury yield, have followed suit. The 10-year yield was last trading just below 2.75 percent, roughly half a percentage point below its early-November high.

(Reporting by Dan Burns and Richard Leong; Editing by Steve Orlofsky and David Gregorio)