U.S. mortgage applications rose last week, led by increased demand for home purchase loans even as interest rates climbed for a fourth consecutive week, an industry trade group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinance and purchase loans, for the week ended Dec. 29 increased 3.6 percent to 575.6. The index stood at 555.8 in the previous week, which was its lowest level since early August.

The MBA said the four-week moving average of mortgage applications is down 2.8 percent.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.22 percent, up 0.10 percentage point from the previous week. Four weeks prior, 30-year mortgage rates sank to 5.98 percent, the lowest level since October 2005.

Interest rates were also above year-ago levels of 6.15 percent.

The MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, rose 4.3 percent to 406.9. The index, however, was below its year-ago level of 418.3.

Demand for home refinancing loans also strengthened as the MBA's seasonally adjusted index of refinancing applications increased 2.2 percent to 1,640.4. A year earlier the index stood at 1,363.2.

The rise in demand for home refinancing loans followed two consecutive weeks of sharp declines.

The refinance share of applications decreased to 48.1 percent from 48.8 percent the previous week.

Fixed 15-year mortgage rates averaged 5.93 percent, up from 5.84 percent. Rates on one-year adjustable-rate mortgages (ARMs) decreased to 5.84 percent from 5.87 percent.

The ARM share of activity decreased to 20.4 percent from 23.1 percent the previous week, its lowest since July 2003.

The MBA's report precedes separate data this week gauging the state of the U.S. housing market.

The National Association of Realtors will release data on pending sales of existing U.S. homes in November on Thursday.

The MBA's survey covers about 50 percent of all U.S. retail residential loans. Respondents include mortgage banks, commercial banks and thrifts.