Last week marked 4th straight rise in applications for mortgages

U.S. mortgage applications rose for a fourth straight week last week as near record-low borrowing costs fueled home buying and refinancing, an industry group said Wednesday.

The Mortgage Bankers Association's mortgage index rose 1.2 percent to 889.1 last week. The gauge of refinancing was 1 percent higher at 3567.6. An index of purchase applications climbed 1.4 percent to 428.6. In January, the purchase index rose to a record 501.6.

The average rate on a 30-year fixed-rate mortgage dropped to 5.34 percent last week, close to the all-time low reached in June, the association said. The National Association of Realtors raised its estimate for 2004 home sales on expectations that mortgage rates will stay low.

The 30-year mortgage rate fell from 5.49 percent the previous week.

Refinancing helps boost consumer spending, which accounts for 70 percent of the economy, by putting more cash in the pockets of homeowners.

Some economists say sluggish growth in jobs and low inflation might prompt Federal Reserve policy-makers to avoid raising interest rates until the second half of the year.