Applications for U.S. home mortgages rose last week as interest rates dropped to their lowest level since February, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 9.5 percent in the week ended March 20.

The MBA's seasonally adjusted index of refinancing applications jumped 12.3 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 4.9 percent to the highest level since January 2015.

The refinance share of total mortgage activity increased to 61 percent of applications from 59 percent the week before.

Fixed 30-year mortgage rates averaged 3.90 percent in the week, the lowest level since February 2015. They were down 9 basis points from 3.99 percent the previous week.

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