Applications for U.S. home mortgages surged last week at the fastest pace in two months as interest rates dropped for a fourth week in a row, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 8.2 percent in the week ended May 6.

"Rates dropped again last week as the Federal Reserve continued its asset purchase program," Michael Fratantoni, MBA's vice president of research, said in a statement.

"Over this four-week span, the refinance index has increased by about 18 percent. Despite the recent increases however, refinance application volumes remain more than 50 percent below levels seen last fall."

The MBA's seasonally adjusted index of refinancing applications surged 9 percent, while the gauge of loan requests for home purchases climbed 6.7 percent.

Refinancing accounted for 63.1 percent of total loan applications, up from 62.7 percent the week before. It was the highest level since late March.

Fixed 30-year mortgage rates averaged 4.67 percent in the week, down from 4.76 percent the week before.