India, Oct. 23 -- US mortgage rates fell for the first time in more than two months. However, the small drop has not encouraged more people to apply for home loans, as borrowing costs remain high. Mortgage rates are still close to their highest levels in several years.

The average 30-year fixed mortgage rate dropped to 7.32% for the week through Wednesday, down from 7.40% a week earlier, according to Freddie Mac data.

Mortgage applications for home purchases fell 7% in a week. Applications for new home purchases dropped through Friday compared with the previous week, according to the Mortgage Bankers Association (MBA), as high borrowing costs and housing affordability concerns continued to keep buyers away.

The overall demand for mortg...