The home mortgage market, severely depressed for more than a year, is showing some fresh signs of life.

Executives and analysts say that loan demand, which plunged after the refinancing boom of 1992 and 1993, is now picking up because of a drop in interest rates and the arrival of spring, traditionally the peak season for homebuying.

Application volume has risen by nearly 30% in the past month, according to industry data. Some lenders are starting to expand their staffs. And, in general, "people are smiling more," says Terrance Hodel, chief executive of California's North American Mortgage Co.

Although no one is sure how long the improvement will last, the prospects are more encouraging than they have been for months.

"We are on the cusp of the first upturn in volume since the refi boom," says Jonathan Gray, an analyst at Sanford C. Bernstein & Co.

The industry could certainly use some more business. After peaking at a record $1 trillion in 1993, industrywide originations fell to somewhere between $650 billion and $700 billion last year amid steadily rising interest rates. As a result, profits slumped and many lenders cut their staffs by more than 30%.

The recent pickup stems in part from a bond-market rally that trimmed rates on 30-year fixed mortgages by about half a percentage point over the past two months, to 8.6%.

At the same time, lenders say, an early spring has brought out a fresh crop of homebuyers and prompted sellers into action. Home sales typically pick up at this time of year because homes can look better in springtime weather and many buyers want to close in time to move in the summer and thus be settled by the start of the new school year.

Industrywide loan applications are up 115% since the beginning of the year and 28% from a month ago, according to an index that is calculated by the Mortgage Bankers Association of America and is not adjusted for seasonal factors.

Jack Eastman, vice president at First National Bank of Chicago, said he has seen a noticeable pickup in business over the last three to four weeks at the First Chicago Corp. unit.

Most of the interest, he said, is coming from first-time buyers.

"So many people refinanced at such great interest rates they are reluctant to move with higher rates," Mr. Eastman said. But people who do not yet own homes are finding the current conditions enticing, he said.

Like many lenders, Mr. Eastman does not want to get his hopes up too much. But he will say this: "I don't feel pessimistic."

Boatmen's National Mortgage Inc., St. Louis, also has seen an increase in activity over the last three to four weeks, said Catherine Peirson, vice president and manager of production.

"There has been a lot of new construction over the last few weeks," she said. "We had an early spring and lower interest rates helped."

Bucking the trend of layoffs in the mortgage industry, Boatmen's is in the process of hiring new staff in its St. Louis regional office.

"We think we will have a good spring and a good year," she said.

Which products are the hottest? While adjustable-rate mortgages surged in popularity over the past year, fixed-rate loans are looking increasingly attractive to consumers because of the rate declines, lenders and observers say.

Thirty-year fixed-rate loans, the industry's old standby, are now the most popular, according to HSH Associates, a rate tracking firm in Butler, N.J.

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