Home buyers are submitting more applications for loans, evidence that the housing market may be picking up steam.

Countrywide Financial Corp. reported today that mortgage loan applications in December were up 11 percent from a year ago. That comes on the heels of a Mortgage Bankers Association survey this week that found a 16.6 percent jump in loan application volume for the week ending Jan. 5 compared to the week before.

Countrywide’s $41.7 billion in loan fundings for December were 7 percent less than a year ago, but up 9 percent from November. The $122 billion in loans funded during the fourth quarter made it Countrywide’s best for the year, although that figure represents a 9 percent decline from 2005.

Countrywide posted those numbers even as it made dramatic cuts in risky subprime and pay-option loan fundings. Nonprime loan funding in the fourth quarter was $10 billion, down 17 percent from the fourth quarter of 2005, and pay-option loan funding in the fourth quarter plummeted 58 percent to $10 billion, down from $24 billion in the same quarter the year before.

According to the latest MBA survey, adjustable-rate loans made up 20.1 percent of applications to lenders in the week ending Jan. 5, down 3 basis points from the week before, and was the lowest share of ARM applications since July 2003.

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