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For the first time in a month, mortgage applications have increased last week.

In the week that ended on February 26, the Mortgage Bankers Association’s index had risen 15 percent. The purchase gauge had also risen 9 percent and the refinancing measure increased 17 percent.

“The outlook for housing this year is not a strong one,” Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, said before the report. “It will be several years before financing volumes return to more normal levels.”

According to the Mortgage Bankers Association, the average rate of a 30-year fixed home loan dropped to 4.65 percent from 5.05 percent during the prior week. During the end of March in 2009, the rate for a 30-year home loan reached its lowest level at 4.61 percent.

The average rate of a 15-year home loan dropped to 4.27 percent from 4.35 percent during the prior week.

Last week applicants, who are looking to refinance a loan, increased 69.1 percent from 68.1 percent during the week prior.

Home sales have dropped, even with the extension of the $8,000 tax credit. During January, existing home sales have dropped 7.2 percent after a 17 percent drop in December.

“I would say the market is in transition,” Richard Dugas, chief executive officer at Pulte Homes Inc. said at a Feb. 23 conference on the homebuilding industry. “There are clearly going to be opportunities in 2010, along with continued risk to go along with it.”