Mortgages rates remain steady as applications bounce back

The Mortgage Bankers Association says mortgage rates have continued to remain historically low, while mortgage volume has picked back up following a drop the week before.

The group says that 30-year fixed-rate mortgages during the week ending January 28 had an average interest rate of 4.81 percent, up just slightly from 4.8 percent the week before.

The MBA's weekly report also showed a sharp increase in applications compared to the previous week, which was skewed by the influence of the Martin Luther King holiday. Purchase applications gained more than 9 percent while refinancing numbers increased by nearly 12 percent.

"Applications increased this week relative to the holiday week," said Michael Fratantoni, MBA's vice president of research and economics. "Looking over the past two weeks, purchase applications are flat, and refinance applications are down about five percent."

However, interest rates aren't expected to stay low forever. The MBA's recent forecast for 2011 predicted that rates would be 5.3 percent by the end of this year, which would increase the cost for people looking to buy Houston homes.