WASHINGTON (AP) — Mortgage applications jumped last week, as low interest rates fueled refinancing activity.

The Mortgage Bankers Association said Wednesday its weekly application index climbed 21.2% for the week ended March 13. The index came in at 876.9, up from 723.4 a week earlier.

On an unadjusted basis, the index rose 20.7% compared with the previous week, the trade group said.

The average rate for traditional, 30-year fixed-rate mortgages dipped to 4.89% from 4.96% a week earlier, according to the MBA report.

About 72.9% of applications came from borrowers seeking to refinance home loans at lower rates, rather than purchase homes. The refinance rate was up from 67.9% in the prior week, the MBA said.

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The trade group’s application index remains below its peak of 1,856.7, reached in May 2003 at the height of the housing boom. The survey provides a snapshot of mortgage lending activity involving mortgage bankers, commercial banks and thrifts. It covers about half of all new residential mortgage loans made each week.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume.

Interest rates have plunged since the Federal Reserve said in November it would buy up to $500 billion in mortgage-backed securities in an effort to bolster the long-suffering housing market.

The average rate for 15-year fixed-rate mortgages slipped to 4.52% from 4.54% a week earlier, while the average rate for one-year adjustable-rate mortgages was fell to 6.20% from 6.21%.