Mortgage applications in the U.S increased last week, following a dip in interest rates in the last week, data released on Wednesday showed.

The Mortgage Bankers' Association's (MBA) Market Composite Index climbed a seasonally adjusted 2.2 percent from a week earlier, hinting at a renewed pick-up in demand for homes. On an unadjusted basis, the Index rose 47.5 percent over the previous week.

The refinance activity too showed improvement, with a corresponding index posting a 4.9 percent rise.

The MBA survey covers more than half of all U.S. retail residential mortgage applications.