(Bloomberg) -- US mortgage rates fell to a five-week low of 6.48%, helping drive a third-straight advance in applications to buy a home.

The 23 basis-points drop in the contract rate on a 30-year fixed mortgage was the biggest in four months, Mortgage Bankers Association data showed Wednesday. The group’s index of mortgage applications for home purchases rose 2.2% in the week ended March 17 to 169.3, the highest since early February.

Treasury yields, which impact mortgage rates, have declined in a flight to safety after the recent collapse of four banks. While retreating, mortgage rates remain generally elevated and lending standards are expected to tighten in the wake of the financial turmoil, representing headwinds for the housing market. 

The outlook for mortgage rates also depends on the path of Federal Reserve policy. Fed officials are projected to announce later Wednesday another quarter-point increase in their benchmark interest rate, extending a series of hikes that initiated the housing market’s rapid deterioration last year. 

The MBA’s index of refinancing applications also increased last week to the highest level since early February, helping propel a third-straight gain in the overall measure of mortgage applications. 

The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

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