There's good news on the mortgage front. The Mortgage Bankers Association reported this morning that applications for home loans picked up last week after seven straight weeks of declines. The industry group's market composite index increased by 0.2% over the preceding week. With the exception of the previous reading, it remains at the lowest level in more than two years and is off by 47% from its May high.

In an upbeat sign for the housing market, last week's increase was entirely a function of purchase-money mortgage applications -- that is, home loans related to the purchase of a home as opposed to the refinancing of an existing mortgage. According to the MBA's data, which covers an estimated 75% of the mortgage market, the purchase-money index grew by 1% on a sequential basis and is 8% higher than the same week last year.

Meanwhile, activity in the refinance market remained the same, with neither growth nor deterioration in the related index. Thanks to higher interest rates, the demand to refinance has dropped considerably over the past two months and is roughly 55% lower than it was at the beginning of May.

Despite the relatively good news, shares of the nation's biggest homebuilders are nevertheless down today. At the time of writing, D.R. Horton (NYSE:DHI) is off by 2.4%, PulteGroup (NYSE:PHM) by 1.7%, and Toll Brothers (NYSE:TOL) by 1.7%. As my colleague John Divine touched on yesterday, much of the fear in this regard stems from fears that the Federal Reserve will soon reduce its support for the economy, which will likely send long-term interest rates -- and, with them, the price of homes -- higher.