HOME-LOAN REQUESTS SOAR 30-YEAR MORTGAGE RATES DECLINE TO 5.34%.

Byline: Gregory J. Wilcox Staff Writer

The interest rate on the benchmark 30-year mortgage sank to 5.34 percent last week, helping boost home-loan applications to their highest level in 35 weeks, an industry tracker said Wednesday.

The rate was 5.49 percent one week earlier and 5.42 percent for the year- ago period, said the Washington, D.C.-based Mortgage Bankers Association.

The lowest rate for this survey was 4.99 percent for the week ending June 13.

Mortgage applications also maintained a healthy pace. The association's Market Composite Index of mortgage loan applications, a measure of purchases and refinance activity, increased 1.2 percent, to 889.1, on a seasonally adjusted basis, up from 878.7 one week earlier.

``There is increasing momentum in activity,'' said Doug Duncan, the association's chief economist. ``The purchase numbers are very strong and if (they) continue at this level we could see another record year of home sales.''

On an unadjusted basis, the index increased by 1.6 percent from the prior week and dropped 43.1 percent compared with the same week one year earlier.

Duncan noted that the difference in the annual numbers is not cause for concern.

``At this time last year we were in a declining rate environment so activity was building,'' he said.

The refinance share of mortgage activity decreased to 56.1 percent of total applications from 56.4 percent the previous week.

And the adjustable-rate mortgage share of activity decreased to 28.1 percent of total applications from 28.8 percent the previous week.

The association's survey covers approximately 50 percent of retail residential mortgage originations across the country. It has been conducted weekly since 1990.

Nima Nattagh, an analyst at FNC, which supplies real-estate market information to the mortgage banking industry, does not expect rates to shoot up from their current territory.

``The rates are probably going to hover around this level for some time,'' he said.

And while refinance activity will probably subside, there should be an uptick in homeowners taking out home-equity lines of credit.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com