U.S. mortgage application activity reached a nearly four-month peak last week even as borrowing costs on 30-year home loans jumped to their highest almost three years, Mortgage Bankers Association data released on Wednesday showed.

The Washington-based industry group said its measure of mortgage applications rose 3.1 percent to 418.1 in the week ended on March 10. This was the highest level since 460.30 in the week ended on Nov. 18.

Interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loan, averaged 4.46 percent, a level last seen in April 2014. They averaged 4.36 percent in the prior week.

Conforming loans are those with balances of $424,100 or less and that qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac.

Mortgage rates have risen in step with benchmark U.S. Treasury yields as the Federal Reserve is widely expected to raise interest rates by a quarter percentage-point later on Wednesday on evidence of an improving economy.

Mortgage rates on other fixed-rate home loans that the MBA tracks also increased from the preceding week.

The association's seasonally adjusted gauge of applications to refinance an existing home loan increased 4.1 percent to 1,413.3, the highest since the week ended on Dec. 16.

The share of refinancing applications grew to 45.6 percent from 45.4 percent the previous week, MBA said.

The MBA's seasonally adjusted gauge of purchase application activity, a proxy for future home sales, rose 2.3 percent to 240.3, the highest since the week ended on Jan. 20.

The share of applications for adjustable-rate mortgages expanded to 8.2 percent last week, their largest since October 2014.

The average interest rate on five-year adjustable-rate loans fell to 3.45 percent last week from 3.48 percent.