As the Federal Reserve is expected to hike interest rates on Wednesday -- possibly by as much as three-quarters of a point -- mortgage demand in the United States is up, according to an industry report.

The Mortgage Bankers Association said in its weekly report that overall applications are up about 6.6% for the week -- but are way down compared to this same time last year.

Total mortgage applications, the MBA said, are down 53% over the past 12 months.

“Mortgage rates increased for all loan types, with the 30-year fixed rate last week jumping 25 basis points to 5.65% -- the highest level since 2008,” MBA Associate Vice President of Forecasting Joel Kan said in a statement.

“Mortgage rates followed Treasury yields up in response to higher-than-expected inflation and anticipation that the Federal Reserve will need to raise rates at a faster pace.”

The Federal Reserve will conclude its two-day policy meeting on Wednesday afternoon. Most analysts think the Fed will order a three-quarter-point rate increase, which would be the largest since 1994.

“Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29% below pre-holiday levels,” Kan added. “With mortgage rates well above 5%, refinance activity continues to run more than 70% lower than last year.”

Analysts say that the prospect of higher interest rates is driving the slight increase in mortgage applications. Refinancing applications are up 4% for the week, the MBA said, but down 76% from where they were a year ago.

Adjustable-rate mortgages, which are often popular during times of higher interest rates, are down and account for only 8% of all mortgage applications, the MBA report noted.