NEW YORK (Reuters) - Americans, enticed by historically low mortgage interest rates, filed a record number of mortgage applications last week for refinancing and home purchases, a trade group reported Wednesday.

The Mortgage Bankers Association of America said its weekly barometer of mortgage application activity rose to a record high of 1,066.9 for the week ended Aug. 2, up 6.2 percent from the prior week. The latest reading exceeded the previous high of 1,055.5 set the week ended Nov. 9, 2001.

The group's seasonally adjusted mortgage refinancing index rose to 5,097.3 last week, up 7.3 percent from the prior week. This was the fourth highest level of the refinancing index and the first time this year that it broke the 5,000 threshold.

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MBA's mortgage purchase index climbed 3.7 percent on a seasonally-adjusted basis from the prior week to 374.

Interest rates on fixed-rate mortgages fell to fresh lows. Thirty-year mortgage rates, excluding origination fees, averaged 6.17 percent, beating the previous low of 6.26 percent set the week of July 19. Fifteen-year rates averaged 5.55 percent last week, below the prior low of 5.70 percent set the week of July 19.

"Rates are going to stay at these ranges for awhile," said Douglas Duncan, the mortgage group's chief economist.

These lower average rates contrasted with those tracked by Freddie Mac, which reported early last Thursday that average fixed mortgage rates moved higher last week prior to the Treasury rally.

The MBA forecast that the U.S. mortgage industry is poised for its second best year ever, on the road to issue $1.9 trillion in new loans this year on the heels of 2001's record $2 trillion in mortgage origination.

"Housing is as strong as ever, and the mortgage business is as good as ever," said Christopher Low, chief economist at FTN Financial.

The roaring real estate market is largely credited with tempering the effects of economic recession, and keeping consumer spending in positive territory. Property values have been appreciating at double digit rates in many markets, as favorable interest rates fuel demand for single family homes.

Low rates, of course, also have enticed existing homeowners to refinance their mortgage loans. In the quest for lower payments, some have refinanced two and three times over the last couple of years as mortgage rates plunged.

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If you bought a home two years ago with a $150,000, 30-year fixed rate loan at 8.52 percent, for example, and you refinanced to a 30-year fixed rate at 7 percent, you'd reduce your monthly payments by $173 and save more than $35,000 in interest payments over the life of your loan.

But the refi process also forces you to cough up new closing costs, so if you plan to stay in your home for less than 5 years more - it may not pay.

The surprise surge in mortgage applications last week is encouraging news for the economy. Some fear the housing market is stuck in a bubble, one that's likely to burst much as the equities market did in early 2000.

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Any significant weakness in the housing market could spell trouble for the economy, since homes have become an alternative form of investment for many Americans trying to escape persistent stock market misery.

Studies have found that every dollar gain in stock wealth increases consumer spending by about 3 to 5 cents, while every gain in housing wealth increases spending by about 11 to 17 cents.

- from staff and wire reports