U.S. home loan demand fell slightly in the week ended March. 11, following a sharp increase in the previous week.

The total loan applications index, a measure of mortgage loan application volume, dropped 0.7 percent on a seasonally-adjusted basis from a week earlier, the Mortgage Bankers Association (MBA) said on Wednesday.

However, the refinancing loans index rose 0.9 percent from the previous week, reaching the highest level since the week since December 2010.

The purchasing index was declined by 4 percent, after reaching the highest level since the start of the year a week earlier. The refinance share of mortgage activity increased to 66.4 percent of total applications from 65.5 percent in the previous week.

The average contract interest rates for 30-year fixed rate mortgage decreased to 4.79 percent from 4.93 percent in the previous week, the lowest rate since the week ending January 14, 2011.

15-year fixed-rate mortgages fell to 4.03 percent from 4.17 percent, the lowest interest rate observed in the survey since the week ending December 3, 2010.