The figures come from The Mortgage Bankers Association, which runs the index on mortgage applications. The figures include both new mortgages and refinancing mortgage applications.

The market has been waiting for some time to see buyers start to jump back into the market, and analysts are hoping that two main factors will help bring buyers back into the market soon... falling home prices and lower borrowing costs.

During last week, the borrowing cost of a 30-year mortgage dropped by 0.23 percentage points, down to 6.24%. The current interest rate is below the peak it hit of 6.59% over the summer, but many buyers are probably still sitting on the sidelines and hoping we see rates fall closer to around the 5.49% that the market saw this past January.

So while today's report is encouraging, we are still a long way from seeing an end to the current housing troubles. Foreclosures continue to rise, home prices continue to fall, and banks continue to tighten their standards for lending money (probably a good thing). All three factors continue to put great pressure on the housing market, and the hard times should continue at least through the winter and into next summer.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.