Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.43 percent, the lowest rates since November 2013, from 4.49 percent the previous week.
While the boost in purchase application volume is a positive sign, the numbers are still way below normal levels. Mortgage origination volumes have been so bad that some are predicting as many as 35 percent of all mortgage firms will either shut down, sell or merge in the next year, according to a recent report by Inside Mortgage Finance. That is potentially 2000 companies.
Read MoreWhat's wrong with housing?
Mortgage applications to purchase a home are not picking up much of the refinance slack. While they were up last week, they are still struggling under a slow spring housing market, far slower than expected.