Applications for U.S. home mortgages rose last week, fueled by demand for refinancing as interest rates fell to the lowest level of the year, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 7 percent in the week ended May 3.

The MBA's seasonally adjusted index of refinancing applications climbed 8.3 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, gained 2.4 percent.

The refinance share of total mortgage activity increased to 76 percent of applications from 75 percent.

Fixed 30-year mortgage rates averaged 3.59 percent, down 1 basis point from the week before, and the lowest level since late December.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.