Mortgage applications rose 1.3% last week, propelled by an increase in refinance loans, the Mortgage Bankers Association reported Wednesday.

Applications to refinance loans rose 3 percent from the previous week, seasonally adjusted, adding to bigger gains seen earlier this month, when rates were falling precipitously.

Mortgage applications to purchase a home decreased 1% for the week, but were 17 % higher than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.83 percent from 3.82 percent last week, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio loans.

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