Applications for home mortgages climbed for a third consecutive week as sinking interest rates encouraged more homeowners to look for refinancings, according to the figures released by the Mortgage Bankers Association today, Reuters reported.

The MBA said its seasonally adjusted index of refinancing applications rose 16.9 percent, in the week ending Jan. 18 to 4,178.2, the highest level since March 2004. Activity has increased 92 percent since the beginning of November and more than offset a 4.6 percent decline last week in the index for home purchase applications, it said.

Refinancings accounted for two-thirds of all applications. The MBA’s market composite index, a measure of overall mortgage loan application volume, increased last week by 8.3 percent to 981.5. The climb followed a drop in the average 30-year fixed mortgage rate to 5.49 percent last week from 5.62 percent in the previous week and 6.18 percent in mid-December, the trade group said.

“It is clear that borrowers are responding to the 40-80 basis point drop in rates we have seen since Nov. 2 across” mortgage products, Jay Brinkmann, vice president of research and economics at the MBA, said in a statement.

Rates on short-term loans also decreased. The average rate on a one-year adjustable mortgage declined to 5.51 percent last week from 5.77 percent in the prior period, the MBA said.