NEW YORK (Reuters) — Demand for mortgages to buy homes and refinance loans bounced from seven-month lows last week, with average 30-year borrowing rates unchanged, the Mortgage Bankers Association said on Wednesday.

The industry group’s total loan applications index rose a seasonally adjusted 10.9% to 493.1 in the week ended July 3, after slumping the prior week to the lowest level since November.

Last week’s report was adjusted to account for the Independence Day holiday on Friday.

A sudden spike in home loan rates from record lows in the spring had derailed a race by homeowners to cut monthly costs by refinancing.

The group’s seasonally adjusted refinancing index rose 15.2% last week to 1,707.7, after a 30% plunge in the prior week.

Purchase applications, which lagged refinancing demand all through the spring home sales season, rose 6.7% last week to 285.6.

The average 30-year mortgage rate stayed at 5.34% last week. That was up from the record low 4.61% in late March, based on MBA data, but sharply below 7.04% in the same week a year ago.

On a four-week moving average, which smooths out volatility, the purchase index rose 1.4% and the refinance index fell 10.9%. 

(source, REUTERS and CNNMoney.com to see article in it’s original context, click here: http://money.cnn.com/2009/07/08/real_estate/mortgage_applications.reut/index.htm?section=money_realestate