(Reuters) - U.S. mortgage application activity rebounded from its lowest since January despite interest rates on 30-year fixed-rate home loans hitting their highest in over 2-1/2 years, Mortgage Bankers Association (MBA) data showed on Wednesday.

The Washington-based industry group said its measure for requests for mortgages rose in the week ended Dec. 16 to 407.3, up 2.5 percent from the prior week's 397.5, its lowest since 328.6 in the week ended Jan. 1.

The average rate on 30-year conforming loans with balances of $417,000 or less, which mortgage agencies Fannie Mae <FNMA.PK> and Freddie Mac <FMCC.PK> guarantee, jumped to 4.41 percent, the highest since May 2014, the MBA said.

The average 30-year conforming rate was 4.28 percent in the previous week.

Home borrowing costs have climbed as U.S. 10-year Treasury bond yields <US10YT=RR> surged - reaching their highest since September 2014 last week.

Traders have bet on faster economic growth and inflation if U.S. President-elect Donald Trump and the Republican-controlled Congress enact big tax cuts, boost federal spending as well as loosen regulations and shake up trade policies.

The rise in U.S. bond yields accelerated after the Federal Reserve signaled a week ago it might raise interest rates at a faster pace due to an improving jobs market and signs that domestic inflation would reach its 2 percent goal.

Interest rates on other types of mortgages also rose on the week.

The average 15-year mortgage rate hit 3.64 percent, its highest since January 2014, while the average five-year adjustable rate reached 3.45 percent, the highest since September 2013.

The MBA's seasonally adjusted refinancing index climbed 3.0 percent to 1449.4 last week from the prior week's 1,407.0, its lowest since the week of Jan. 8.

The group's seasonal gauge of applications to buy a home, seen as a proxy for future home sales, rose 2.7 percent to 232.9 last week.

(Reporting by Richard Leong in New York; Editing by Jeffrey Benkoe)