US mortgage applications fell 1.5% in the third week of September, extending a 4.1% decline in the previous period and producing a third consecutive drop, according to Mortgage Bankers Association data. The decrease coincided with a sharp rise in borrowing costs, as the benchmark 30-year fixed mortgage rate averaged 7.12%, its highest level in two years. Nearly 10% of applications were for riskier adjusted-rate mortgages. Refinancing applications, which are more sensitive to short-term interest-rate changes, declined 3%, while applications to buy a home slipped 1%. Longer-maturity Treasury yields surged at the start of the month as high energy prices, increased debt supply and widening deficits reduced exposure to duration in fixed income.