As interest rates fall, mortgage refinancing is surging.

Applications to refinance a home loan increased 27% last week compared with the previous week, the Mortgage Bankers Association reported on Wednesday. The surge comes as interest rates fell for the third week in a row. Purchase applications fell 4% week-over-week, but were 4% higher than a year ago. 

"In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow gradually in many markets,” the MBA's Joel Kan said in a release.