Applications for U.S. home mortgages rose to their highest levels in over a year last week as home purchases and loan refinancings continued to rebound, an industry group said Wednesday.

The seasonally adjusted index of total mortgage applications jumped 11.4 percent in the week ended Dec. 8 to 721.2, the highest level since October 2005, following a recent drop in borrowing costs, according to the Mortgage Bankers Association.

The four-week moving average for the applications index rose by 2.9 percent to 647.9, the MBA said.

Long-term, 30-year fixed mortgage rates that influence most home loans averaged 6.02 percent in the week ending Dec. 8. In the week ending Dec. 1, 30-year mortgage rates sank to 5.98 percent, the lowest level since October 2005, the MBA said.

"The substantial decline in mortgage rates over the last six months, greater than 80 basis points in total, has led to a significant increase in refinance activity," Mike Fratantoni, senior economist at the MBA, said in a statement.

The MBA's measure of loan refinancing jumped 15.8 percent to 2,304.4, signaling that homeowners were seeking new loans at the fastest pace since September 2005, the group said. Its index measuring loans earmarked for home purchases rose 8.7 percent to 463.8, the highest since January.