NEW YORK (Reuters) - Applications for home mortgages tumbled last week as short-term interest rates soared and refinancing requests fell back to November levels, an industry group said on Wednesday.

The Mortgage Bankers Association said in a statement its seasonally adjusted index of mortgage application activity slid 19.5 percent to 653.8 in the week ended December 14. It was the largest weekly percentage decline since April 2004, and erased much of a surge at the end of November.

The decline was led by the MBA's seasonally adjusted index of refinancing applications which slumped 27.3 percent to 2,093.6 in the week, the MBA said. The drop put the index at the lowest level in four weeks.

The MBA's purchase index, a gauge of loan requests for home purchases, fell 10.6 percent to 422.2, also a four-week low, the MBA said.

Applications slumped as rates on one-year adjustable mortgages jumped by 17 basis points on the week to 6.48 percent -- the highest since late August -- as the crisis in short-term lending worsened, MBA data showed.

Higher rates, coupled with tighter lending standards, have led to a sharp decline in applications for adjustable-rate mortgages, which are now down 41 percent from mid-November, Michelle Meyer, an economist at Lehman Brothers, said in a note to clients.

The rise in adjustable mortgage rates comes along with a jump in the London interbank offered rate, or Libor, another rate stressed in recent weeks as banks facing year-end pressures were less willing to lend to one another.

Poor short-term funding levels also pushed levels on jumbo mortgages to some 100 basis points above 30-year fixed rates this month from about 60 basis points in October, analysts said. The gap was 15 basis points during the housing boom.

Short-term money market rates have declined this week after central banks in Europe and the U.S. acted to pump money into the banking system. Solid demand for the Federal Reserve's auction of 28-day loans on Wednesday also suggested global credit conditions are improving, analysts said.

Fixed 30-year mortgage rates averaged 6.18 percent last week, up 11 basis points, the association said.

(Reporting by Al Yoon, Editing by Chizu Nomiyama)