An industry group’s index of U.S. mortgage applications increased 32.2 percent to 1,159.4 last week as record low interest rates heightened demand for home refinancing loans, Reuters reported.

The Mortgage Bankers Association (MBA) said refinancing accounted for 78.5 percent of all applications for the week ended March 20.

The surge is seen as a result of the Federal Reserve announcing last week its plans to purchase Treasury securities for the first time in more than four decades, which resulted in lower interest rates. Click here to read the full story.

For 30-year fixed-rate mortgages, borrowing costs, excluding fees, averaged 4.63 percent, down 0.26 of a percentage point from the precious week and a record low, the MBA said. Last year, interest rates were 5.74 percent.

“The drop offered a sizable refinance incentive for most homeowners, sparking a pickup in refinance activity,” Orawin Velz, associate vice president of economic forecasting at the MBA, said in a statement.

Last week, mortgage applications were 20 percent above their year-ago levels. The four-week rolling average of applications, which eases the volatile weekly figures, was up 13.9 percent.

“The housing market is coming back, but not roaring back,” said Leif Thomsen, chief executive of Mortgage Master in Walpole, Mass. “We have gone from a crawl to a brisk walk, and we will still have to navigate some pitfalls before we are able to get running again.”