Applications to buy homes and refinance loans jumped last week to mid-December levels as average 30-year mortgage rates held near 5 percent.

The industry group's mortgage index jumped 21 percent last week, fueled by a 26.3 percent leap in demand for refinancing as purchase loan requests increased 10.3 percent.

The 30-year mortgage rate dipped 0.01 percentage point to 5.01 percent.

But this borrowing cost was 0.40 percentage point above the record low set last March and seen headed higher throughout the year.

"Rates continue to hover around 5 percent, quite low by historical standards, but are well above the record lows seen in 2009 and hence are not generating substantial refi volume," said Michael Fratantoni, MBA's vice president of research and economics.

Last spring when mortgage rates hit rock bottom, the index for refinance applications was more than double its current level.

Nonetheless, as the U.S. housing market claws its way out of the worst crash since the Great Depression there are increasing signs that the important spring selling season could be relatively healthy.

Affordability remains high with mortgage rates still historically low and average home prices plunging about 30 percent from 2006 peaks before stabilizing since last summer.

The government's bonus to first-time and move-up buyers via a tax credit remains in place for several more months, luring buyers who have been sitting on the sidelines waiting for some signs of stability