I've long thought that the first light for a recovery of U.S. housing would have to shine in the mortgage sector. After all, the area has been decimated by a lack of lending standards and the disappearance of a number of prominent lenders, including Countrywide, which was bought earlier this year by Bank of America (NYSE:BAC).

On that basis, it seems to me that a U.S. housing recovery is materially dependent, at least in part, on adherence to more uniform standards and ultimately increased volume in the lending arena. So, whether the light that's beginning to shine is a bit of positive illumination or an oncoming train remains uncertain.

With mortgage rates having declined during the past few weeks, the likes of Bank of America, Regions Financial (NYSE:RF), and JPMorgan Chase (NYSE:JPM) all have seen their mortgage application activity improve significantly. Bank of America is switching 300 loan processors across the Southeast from handling home-equity loans to specializing in mortgage lending.

A significant portion of the increased activity appears to relate to sliding interest rates, which last week fell to an average of 5.17% for 30-year fixed-rate loans -- the lowest level since Freddie Mac (NYSE:FRE) began keeping tabs in the early 1970s. The current rate represents a decline from about 6.14% a year ago.

Other banks experiencing increased demand include US Bancorp (NYSE:USB) and SunTrust (NYSE:STI). Nevertheless, if the experience at Bank of America and Regions can be extrapolated, the bulk of applications are for refinancings -- only about a quarter of their applications are tied to new purchases.

Any rays of mortgage lending sunshine these days should be considered a potential first positive step for homebuilding in the U.S. My intention is to keep tabs on this trend among the major financial institutions mentioned above. While I've said that the mortgage sector -- and consequently homebuilding -- can't possibly recover meaningfully until 2010, I wouldn't mind being forced to cook up and devour a little financial crow.  

US Bancorp, JPMorgan Chase, and Bank of America are Motley Fool Income Investor recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. The Fool has a well-financed disclosure policy.