Purchases picked up 1 percent and overall applications are nearly 10 percent above the level they were at last year.
Rates on 30-year fixed-rate mortgages with balances at $417,500 or less decreased to 3.47 percent, from 3.52 percent, the lowest rate in the history of the survey.
The rate for 30-year loans with balances greater than $417,500 dropped to 3.77 percent from 3.79 percent.
On 30-year mortgages backed by the Federal Housing Administration, rates fell to 3.32 percent from 3.34, another record-low rate.
The average rate on 15-year-fixed mortgages decreased to 2.85 percent from 2.86, another all-time low.