Mortgage rates tick up above 4 percent

Last month, rates hit historic lows, down to about 3.87 percent, for the first time in more than 60 years. 

Interest rates have likely increased with bond yields during the past two weeks, which have been boosted by an improving assessment of the state of the economy by the Federal Reserve, along with better than expected results of commercial bank stress tests and the likelihood of a second bailout for Greece. 

Meanwhile, consumers continued to reduce their debt burdens in the fourth quarter of 2011, Nothaft said. 

For instance, homeowners reduced their financial obligations ratio — debt payments as a share of disposable income — to the lowest point since the second quarter of 1994, according to Nothaft. 

Meanwhile, the average on a 15-year fixed mortgage increased to 3.3 percent, up from 3.16 percent last week and a record low of 3.13 percent two weeks ago.

Still, lighter credit standards and higher requirements for down payments have stymied many potential homebuyers, who are unable to make purchases or lock into the lower rates.

In the past several months, the housing market has shown more consistent signs of improvement — existing home sales were the best in five years this winter — but experts acknowledge that this year will be slow going and a full recovery could take years. 

The market is still flooded with foreclosures and more are expected this year as lenders continue to shed bad loans. 

A recent $25 billion settlement among the nation's largest banks and federal and state governments could result in more distressed housing hitting the market. Banks had slowed the process during the 18-month investigation.