- The average rate on the 30-year mortgage edged down this week to hover again above record lows. Cheaper rates have spurred modest improvements in the battered housing market, but not enough to signal a recovery.

Mortgage rates have been below 4 percent for more than three months. That has made home-buying and refinancing more attractive for those who can qualify.

Home sales have improved and the four-week average of home-purchase applications was up a smidge last week, according to the Mortgage Bankers Association. Refinancing now makes nearly 78 percent of mortgage activity.

But government programs have been propping up the relatively low level of mortgage applications. The Obama administration's revamped refinancing program, the Home Affordable Refinance Program, or HARP, now accounts for more than 20 percent of refinancing nationwide.

Builders are more optimistic and construction has picked up. The supply of homes fell last month to its lowest point in nearly seven years, which could send home prices higher.

Nationwide, home prices have fallen by 33 percent since hitting their peak in late 2006. Single-family homes are considered "undervalued assets" when looking at both rents and incomes, according to Capital Economics.