As a greater number of homeowners took advantage of low mortgage rates for more affordable closing options, there was a surge of refinancing activity during the week ending February 10.

According to the Mortgage Bankers Association's most recent Primary Mortgage Market Survey, overall there was a 1 percent decrease in total application activity. However, the refinancing share increased to account for a 81.1 percent share of all applications.

The report indicated that this is the higher share refinancing has had since the week ending January 20.

Meanwhile, the survey also showed that a greater number of borrowers opted for a refinance into a fixed-rate mortgage with a lower rate, while the application share of adjustable-rate mortgage dipped to 5.4 percent from 6 percent the previous week. 

Additionally, the average loan size increased to $226,000 during the course of January, which is slightly higher than the end of 2011 when the loan size averaged $225,000. However, in January 2011, it averaged $207,000. This increase in loan size could indicate that borrowers are gaining more confidence in the amount of debt they are filling to take on in the wake of a number of positive economic indicators. 

Borrowers weren't the only individuals to recently gain confidence. According to the National Association of Home Builders, builder confidence increased to the highest level recorded in four years in February.

The NAHB/Wells Fargo Housing Market Index showed that builder confidence rose from 25 in January to 29 this month.

"Builder confidence has doubled since September as measured by the HMI," said NAHB chairman Barry Rutenberg. "Given the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth."

However, Rutenberg added that the nation's housing market remains suspended in a fragile state and lawmakers should work to guard households against any further economic shocks that could cripple the real estate industry even more and reverse any progress made in recent months.

This is the longest single-period of improvement recorded in NAHB's HMI since 2007. As a result, industry experts anticipate an elevated number of prospective buyer traffic in the coming months as well as improvement in sales conditions.