Applications for U.S. home mortgages dipped last week as refinance demand sagged, though activity in home purchases picked up, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 1.2 percent in the week ended March 2.

The MBA's seasonally adjusted index of refinancing applications was down 2.0 percent, but the gauge of loan requests for home purchases gained 2.1 percent.

The refinance share of total mortgage activity fell to 77.0 percent of applications, the lowest level since December, from 77.9 percent the previous week.

Fixed 30-year mortgage rates averaged 4.06 percent, off 1 basis point from 4.07 percent the week before.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Leah Schnurr; Editing by Leslie Adler)